About the ReportAbout the Report
Content
About the Report 04
Chairman Statement 05 16 Green Transformation Building a Caring for Employees and Promot-Beautiful Home Together 42 ing Social Harmony
About Luoxin 06
Pharmaceutical
Environmental Management 18 Employee Interests and Development 46
System
ESG Governance 12 Employee Care and Well-being 48
Response to Climate Change 22 Occupational Health and Safety 50
Green Operations 25 Social Contributions and Philanthropy 52
Key Performance 64
Indicators
Indicator Index Table 67
Feedback Form 68 32 Innovation-led Development for 52 Strengthening Governance a Healthy Future to Lay a Solid Foundation for Development
Innovation-Driven Industrial Upgrading 34 Party Building Drives Development 56
Supply Chain Management 38 Corporate Governance Structure 58
Product Responsibility and Quality Safety 40 Risk Management and Internal Control 60
Transparency in Governance 62
02 032025 Environmental Social and Governance (ESG) Report About the Report / Chairman Statement
About the Report Chairman Statement
This report is the first annual Environmental Social and Governance (ESG) Report of Luoxin Pharmaceutical Group Stock Co. Dear investors business partners all Luoxin employees and friends from all sectors of society:
Ltd. (hereinafter referred to as “the Report”) disclosing and presenting the Company's performance in environmental social
and corporate governance areas to stakeholders and other parties. The Report has been reviewed and approved by the Board Greetings!
of Directors of the Company which assumes responsibility for the authenticity and validity of the information contained herein. The seasons change and new chapters unfold. On behalf of the Company I would like to extend our sincerest gratitude to
every partner who has placed their trust in Luoxin Pharmaceutical and supported our growth over the years! I also offer my
deepest respect to all Luoxin employees who have remained dedicated to their posts and worked tirelessly with unwavering
Scope of Report Scope of Time commitment!Since its founding in 1988 Luoxin Pharmaceutical has been in business for 37 years. Over the past 37 years through thick and
thin we have consistently upheld our corporate philosophy of “Delivering Health” adhered to the Luoxin Spirit of “Hard WorkIntegrity Innovation and Discipline” and put into practice our core values of “Returning to Employees Customers Share-The scope of information disclosed in the Report covers Lu- Unless otherwise specified the scope of time covered in the holders and Society and Strengthening the Company.” Producing medicine requires integrity; the pharmaceutical industry is
oxin Pharmaceutical Group Stock Co. Ltd. its subsidiaries in Report is from January 1 s t 2025 to December 31 s t 2025. an industry of conscience and above all an industry of responsibility. We have always firmly believed that the sustainable
which it holds equity interests and its wholly-owned subsid- To ensure the completeness of the Report the scope of time development of the Company has always gone hand in hand with safeguarding people’s health and fulfilling our social respon-
iaries which is consistent with the scope of the consolidat- for certain information has been extended both forward sibilities. ESG is not an additional burden but rather an integral part of Luoxin Pharmaceutical’s high-quality development and
ed financial statements of Luoxin Pharmaceutical (002793). and backward. the essential path to becoming a company that survives for centuries.
2025 was critical for Luoxin Pharmaceutical in deepening and implementing its innovation and transformation. Amid thewaves of industry transformation guided by the principle of “Driving Enterprise Development Through Technology and RallyingData Sources Report Access Strength Through Unity” we have progressively integrated ESG principles into every aspect of our operations. Through con-crete actions we have delivered a response that is compassionate impactful and substantive.The reporting entities are Luoxin Pharmaceutical Group This report is published in both Chinese and English. In the Safeguarding Lives Through Hardcore Innovation and Uniting Our Strength Through Shared Vision and Mu-Stock Co. Ltd. its subsidiaries in which it holds equity inter- event of any discrepancy between the two versions the Upholding Our Founding Commitment of “Benevolent tual Success Demonstrating the Sense of Responsibil-ests and its wholly-owned subsidiaries. The financial data Chinese version shall prevail. You may find more information Pharmaceutical Practices” ity that Defines “Responsible Luoxin” in This Era
used is from the Company’s audited annual report and oth- about our environmental social and governance practic-
er data is from official documents and statistical reports of es on the Shenzhen Stock Exchange website (https://www. We adhere to a research and development strategy that Talent is the core competitive advantage of a company. Wethe Company. szse.cn/index/index.html). emphasizes “Long-term Perspective Current Focus and are advancing the upgrade of our talent strategy strength-Simultaneous Innovation and Adaptation” focusing on un- ening the development of a young and professional team
met clinical needs in the fields such as: gastroenterology and building a platform for diverse career development so
respiratory medicine and oncology. After years of refine- that every Luoxin employee can share in the fruits of the
Basis for Preparation Contact Information ment the core product of the Company Tegoprazan Tablets Company's growth. We work closely with our upstream and
(Taixinzan) has all been included in the national medical downstream partners to promote supply chain standardiza-
insurance coverage for three indications and several oth- tion and achieve mutual benefit and win-win outcomes. We
er innovative drugs are making steady progress poised to are actively engaged in public welfare initiatives carrying
The Report complies with the Shenzhen Stock Exchange Address: No. 18 Luoqi Road National High-Tech Industrial bring new hope to patients. Guided by the bottom-line prin- out a wide range of charitable activities such as educational
Listed Companies Self-Regulatory Guidance No. 3 — Prepa- Development Zone Linyi Shandong Province / 7th Floor ciple that “Quality Is the Company’s Lifeline” we rigorously assistance and rural support programs. By contributing to
ration of Sustainability Reports (Revised in 2026) Shenzhen Building A Block 1 Qiantan World Trade Center No. 4 Lane oversee every stage of the production process and uphold rural revitalization and improving people’s livelihoods we
Stock Exchange Listed Companies Self-Regulatory Guidance 255 Dongyu Road Pudong New Area Shanghai international standards to ensure quality. Every single pill give back to society through concrete actions and upholdNo. 17 — Sustainability Reports (Trial) with reference to the Contact number: 021-38867666 we produce embodies the sense of responsibility and com- our founding principle of “Benefiting the World with IntegrityGlobal Sustainability Standards Board (GSSB)'s GRI Sustain-
ability Reporting Standards (GRI Standards) and the Sustain- Fax: 021 -38867600mitment of the Luoxin team. and Kindness.”
able Development Goals (SDGs) of the United Nations. Email: IR@luoxin.cn
Empowering Development Through Green Transfor- In 2026 standing at a new starting point we will be guided by
mation and Strengthening the Ecological Foundation the spirit of the dragon and the horse and with the vigor of a
of “Sustainable Operation” galloping steed we will continue to refine our ESG manage-
Reference Explanation ment system. We will remain committed to innovation-driven development accelerate the cultivation of new-quality pro-
As a pharmaceutical manufacturer we are fully aware that ductive forces and strive to bring more innovative drugs to
our environmental responsibilities are of the utmost impor- clinical trials to benefit patients; we will dedicate ourselves
Company Abbreviation Company Full name tance. In 2025 we will continue to ensure our investment to green transformation advance environmental protection in environmental protection promote the green transforma- efforts with higher standards and establish a benchmark for
Luoxin Pharmaceutical the Company we Refer(s) to Luoxin Pharmaceutical Group Stock Co. Ltd. tion of production processes optimize our energy structure green manufacturing in the pharmaceutical industry; we will
strictly control the discharge of “three wastes” and ensure uphold our social responsibilities deepen collaboration with
Shandong Luoxin Refer(s) to Shandong Luoxin Pharmaceutical Group Stock Co. Ltd. that pollutant emissions consistently meet standards while all stakeholders and build a more harmonious industrial eco-
gradually improving energy efficiency. We have established system.Human life is of the utmost importance; it is worth
HENGXIN Pharmaceutical Refer(s) to Shandong Luoxin Pharmaceutical Group HENGXIN Pharmaceutical Co. Ltd. a comprehensive environmental protection management more than a thousand pieces of gold. Nothing can surpass
system to standardize the disposal of solid waste. By em- the virtue of saving a life with medicine. Let us join forces
YUXIN Pharmaceutical Refer(s) to Shandong YUXIN Pharmaceutical Co. Ltd. bracing “Green Production and Low-Carbon Operations” we and move forward together demonstrating our commitment
are exploring new pathways for green development in the through hard work and driving development through innova-
Lekang Pharmaceuticals Refer(s) to Shandong Lekang Pharmaceutical Co. Ltd. pharmaceutical industry making sustainability the defining tion so that Luoxin can contribute its strength to safeguard-
feature of Luoxin’s growth. ing human health and promoting the sustainable develop-
Luoxin Aurovitas Refer(s) to Luoxin Aurovitas Pharmaceutical (Chengdu) Co. Ltd. ment of the pharmaceutical industry!
Shanghai Luoxin Refer(s) to Luoxin Pharmaceutical (Shanghai) Co. Ltd. Luoxin Pharmaceutical Group Stock Co. Ltd.Chairman Liu Zhenteng
04 052025 Environmental Social and Governance (ESG) Report About Luoxin Pharmaceutical
About Luoxin Pharmaceutical 2025 Highlights
Company Overview 2025
Luoxin Pharmaceutical Group Stock Co. Ltd. (Stock Code: 002793.SZ) went public through a major asset reorganization in
2020. Its core operating entity Shandong Luoxin Pharmaceutical Group Stock Co. Ltd. was founded in 1988 (originally estab-
lished as Luozhuang Medicinal Materials Business Department of Linyi City) and is a leading comprehensive pharmaceutical
enterprise in China. Guided by its corporate philosophy of “Delivering Health” the Company drives its growth through techno- March 2025
logical innovation focuses on unmet clinical needs and is committed to providing more innovative medicines to patients world-wide. The Company has been ranked among China’s Top 100 Pharmaceutical Enterprises and has also been honored on the " The new indication “prevention of stressChina’s Best Industrial Enterprise for Pharmaceutical R&D Product Lines " list. The Company has received numerous national ulcer bleeding in critically ill patients” for
and provincial awards including the Second Prize of the National Science and Technology Progress Award and the Shandong LX22001 for Injection of Shandong Luoxin March 2025
Provincial Governor’s Quality Award. It is designated as a Key High-Tech Enterprise under the National Torch Program a Nation- and Shanghai Luoxin was approved for
al Model Enterprise for Technological Innovation and a National Model Enterprise for Intellectual Property. clinical trials. Levalbuterol Hydrochloride Inhalation
The Company places a high priority on technological innovation and operates R&D centers in both Shandong and Shanghai. Solution of Luoxin Aurovitas was granted
It maintains multiple national and provincial-level research platforms including a National Enterprise Technology Center and a Drug Registration Certificate which is
a National Postdoctoral Research Station. At the same time the Company has established a mature efficient and environ- deemed equivalent to passing the gener-
mentally friendly production and supply system encompassing high-quality manufacturing facilities such as Shandong Luoxin ic drugs consistency evaluation.YUXIN Pharmaceutical and HENGXIN Pharmaceutical. Its quality assurance system complies with international certification
standards such as U.S. cGMP and PIC/S and has also passed ISO9001 quality management system certification. May 2025Luoxin Pharmaceutical adheres to the guiding principles of integrity and innovation as well as the values of “Returning to Em- Ibuprofen Concentrated Solution for In-ployees Customers Shareholders and Society and Strengthening the Company.” We are committed to continuously creating jection of Shandong Luoxin was granted
maximum value for our customers and serving them with high-quality products competitive prices and excellent service. a Drug Registration Certificate which is
deemed equivalent to passing the gener- June 2025Corporate Culture ic drugs consistency evaluation. The project “Key Technologies and Indus-trialization of Common Crystallization
Characteristics for a Series of Drugs In-
cluding Metformin Hydrochloride andProton Pump Inhibitors” was awarded
Luoxin Spirit Hard Work Integrity Innovation and Discipline the Second Prize for 2024 Scientific and
October 2025 Technological Progress in Shandong Prov-
ince in recognition of its groundbreakingIntegrity Legal Compliance The project “Key Technology Research innovations.Business Philosophy Recruit and foster outstanding talent to meet the Company's needs and Industrialization of Ambroxol Hydro-and provide our customers with the value they seek chloride Spray for Children” was selected
for the provincial innovation achieve-
To work - dedication ments promotion catalog.Luoxin Employee Code of
Professional Conduct To the Company - loyalty
To themselves - cultivating Virtue November 2025
The Company secured three honors at the
Corporate Philosophy Luoxin Pharmaceutical Delivering Health Taishan Pharmaceutical Forum: “Top 100 December 2025 Pharmaceutical Companies by Revenue”“Top 50 Pharmaceutical Companies forThe Company’s core product TegoprazanLuoxin Survival Independent Innovation” and “Law-Abid-Vigilance Innovation and Development Tablets (brand name: Taixinzan) for ing and Integrity-Driven Pharmaceutical Strategies “eradication of Helicobacter pylori (Hp) Company.”
in combination with appropriate anti-Returning to Employees: Provide employees with greater opportunities biotics” has been included in medical
for growth and better rewards insurance. Combined with the renewed
indications for “reflux esophagitis (RE)”
Returning to Customers: Create the values that customers need and “duodenal ulcer (DU)” the drug has
Returning to Shareholders: Strengthen and expand the Company to achieved full national health insurance
Luoxin Values deliver greater returns to shareholders
coverage for all its approved indications
providing patients in China with greater
Returning to Society: Contribute more taxes to the country actively access to innovative treatment options
participate in social programs to assist the disadvantaged and allevi- for acid suppression therapy.ate poverty create employment opportunities for the community and
provide more and better high-tech medications for the treatment and
rehabilitation of patients
Strengthening the Company: Build a better bigger and stronger Luoxin
06 072025 Environmental Social and Governance (ESG) Report About LuoxinA bPohuatr mthaec Reuetpicoartl
2025 Honors and Awards
Top 50 Companies for Independent Innovation
Law-Abiding and Integrity-Driven Company and National High-Tech Enterprise All-China Federation of Industry and Ranked No. 1 in China's Comprehensive
Top 100 Companies by Revenue as recognized by Commerce Social Responsibility Assessment Statistics on Over-the-Counter
the Pharmaceutical Industry Association of the Shandong Provincial Department of Science Results for Private Enterprises: 88 points Medicines - Ambroxol Hydrochloride TabletsAll-China Federation of Industry and Commerce and Technology Shandong Provincial Depart-
Pharmaceutical Industry Association of the ment of Finance Shandong Provincial Tax
All-China Federation of Industry and Commerce Service State Taxation Administration All-China Federation of Industry and Commerce China Nonprescription Medicines Association
2025 Shandong Province Model Enterprises
for the Innovative Integration of the Real Top 100 Innovative Private Enterprises Shandong Provincial Manufacturing
Economy and the Digital Economy in Shandong Single-Item Champion Enterprise
List of Phoenix Enterprises in Linyi
Shandong Province Promotion Center for the In- Federation of Industry and Commerce of Department of Industry and Information
tegration of Informatization and Industrialization Shandong Province Technology of Shandong Province Linyi Municipal People's Government
Linyi Model Workers and Skilled Craftsmen Yimeng Quality Goods - Tegoprazan Linyi Key Laboratory for Research and Linyi Key Laboratory for Solvent-Crystallized Innovation Studios Development of Small-Molecule Chemical Drugs Pharmaceuticals
Linyi Federation of Trade Unions Linyi Market Regulation Bureau Linyi Science and Technology Bureau Linyi Science and Technology Bureau
Linyi Pilot Demonstration Base for Small-Molecule Linyi Modern Medicine (Small-Molecule Chemical
Chemical Pharmaceutical Ingredients Drugs) Innovation Consortium
Linyi Science and Technology Bureau Linyi Science and Technology Bureau
08 092025 Environmental Social and Governance (ESG) Report About Luoxin Pharmaceutical
2025 ESG Performance Highlights In response to the United Nations Sustainable Development Goals (SDGs)
Economic Performance United Nations Sustainable Development Goals (SDGs) Chapter
III. Caring for Employees and 2. Employee Care and Well-being
2273.4577 3725.2925 Promoting Social HarmonyRMB million RMB million 4. Social Contributions and Philanthropy
2. Employee Care and Well-being
Operating income Total assets III. Caring for Employees and
Promoting Social Harmony 4. Social Contributions and Philanthropy
II. Innovation-led Development for a Healthy Future 3. Product Responsibility and Quality Safety
RMB 288.5802 million RMB 189.7028 million III. Caring for Employees and Promoting 2. Employee Care and Well-being
Social Harmony 3. Occupational health and safety
Net profit attributable to the parent company Total tax paid
II. Innovation-led Development for a Healthy Future 1. Innovation-Driven Industrial Upgrading
III. Caring for Employees and Promot-
ing Social Harmony 4. Social Contributions and Philanthropy
III. Caring for Employees and Promoting
Environmental Performance Social Harmony 4. Employee Interests and Development
IV. Strengthening Governance to Lay a Solid
Foundation for Development 3. Corporate Governance Structure
RMB 14.0132 million 237.73 tons 2268 person-time(s) I. Green Transformation Building a Beautiful Home Together 3. Green Operations
Environmental protection Total recyclable waste Number of employees trained
investment in environmental protection
III. Caring for Employees and Promoting
Social Harmony 4. Employee Interests and Development
Social Performance II. Innovation-led Development for a Healthy Future 1. Innovation-Driven Industrial Upgrading
1. Employee Interests and Development
100 196 173 III. Caring for Employees and Promoting % time(s) time(s) Social Harmony 4. Social Contributions and Philanthropy
Employee physical Number of employee Number of safety
examination coverage rate training sessions training sessions I. Green Transformation Building a
Beautiful Home Together 3. Green Operations
25797 person(s) 375 item(s) 20 item(s) 1. Environmental Management System
I. Green Transformation Building a
Beautiful Home Together 2. Response to Climate ChangeNumber of employees Total number of R&D projects
covered in safety training granted patents 3. Green Operations
II. Innovation-led Development for a Healthy Future 2. Supply Chain Management
2. Response to Climate Change
I. Green Transformation Building a
Governance Performance Beautiful Home Together 3. Green Operations
IV. Strengthening Governance to Lay a Solid 1. Party Building Drives Development
500000 RMB 23 item(s) 15 item(s) 42.86 Foundation for Development%
Funds for party building Number of party Number of board meet- Percentage of inde- II. Innovation-led Development for a Healthy Future 2. Supply Chain Management
activities building activities ings held pendent directors IV. Strengthening Governance to Lay a Solid
Foundation for Development 4. Transparency in Governance
10 112025 Environmental Social and Governance (ESG) Report ESG Governance
ESG Governance Stakeholder Communication
Luoxin Pharmaceutical has always placed great emphasis on fostering positive interactions and collaborative development with
ESG Governance Structure all stakeholders. When identifying key stakeholders the Company comprehensively evaluates key factors such as the degree of operational dependence the balance of rights and responsibilities between the parties and the extent of their influence on the
Company’s development using these as important references for building its ESG governance system and optimizing its sustain-
ability practices. The Company is committed to building a community of shared interests a community of shared values and a
Guided by the national strategy for high-quality development the Company actively responds to global sustainability trends and community with a shared future for development with all stakeholders and to continuously strengthen the sustainable foundation
regards ESG governance as a key driver of its long-term growth. Luoxin Pharmaceutical will comprehensively plan the development of these partnerships through long-term communication and collaboration.of its ESG management system. The Company intends to establish a professional ESG governance structure and with this as the
core build a sustainability organizational framework that spans all business segments and connects all functional departments
thereby deeply embedding ESG principles into every aspect of the Company’s operations. Through the design of a systematic and Stakeholders Expectations and Appeals Communication Channels
institutionalized governance structure the Company has deeply embedded the principles of sustainable development into the very
fabric of its operations. By adopting a forward-looking approach it demonstrates its social responsibility and commitment and
continues to strive toward a sustainable and high-quality future. Compliance with law and regulations Policy communication and industry
engagement
The Company has preliminarily outlined three tiers of ESG: Ensuring the quality and safety of medicines Legitimate and timely disclosure of
Board of Directors Government and Regulatory Reasonable and legal operations information
Organizations Tax compliance Compliance regulation and inspection
Composed of the Company's board members the Board serves as the highest decision-making body for ESG governance. It is
responsible for reviewing and approving the Company's ESG strategic plans overseeing the implementation and performance of
ESG objectives and approving the Company's ESG reports.Compliance and risk management General meeting
ESG Leadership Team Prudent management Company website
The body responsible for researching and guiding ESG initiatives. It is responsible for identifying ESG-related risks formulating the Information disclosure Performance briefing
Company's ESG development strategies medium and long-term ESG objectives and work plans; managing the operation of the Shareholders and Investors Protection of shareholders' interests Timely disclosure of information
ESG system and the implementation of related initiatives; and guiding the day-to-day execution of ESG activities.ESG Work Team
Stable partnerships Regular communication
Composed of ESG liaisons from each department this team is responsible for the execution and implementation of all ESG initia- Integrity in business
tives under the guidance of the ESG Leadership Team. Company websiteMaintain timely communication with
Suppliers upstream and downstream partners Digital purchasing platform
Safeguarding consumer interests
Adhering to business ethics Timely disclosure of information
Ensuring the quality and safety of Product hotline
Decision-Making Body medicines Handling of consumer complaints
Review and approve the ESG strategy and monitor ESG perfor- Consumers High-quality after-sales service and feedback
Board of mance and progress toward objectives
Directors
Safeguarding basic employee interests “Let’s Talk It Over” Workshop
Management Employee health and safety Employee training
Safeguarding remuneration and benefits
ESG Develop ESG strategic objectives and plans manage the opera-
Employee satisfaction survey
tion of the ESG framework and ensure the implementation of re- Employee diversityEmployees Safety training and drillsLeadership Team lated initiatives and report regularly to the Board of Directors on Providing employee training Support for employees in difficulty
ESG matters and progress
Community service and philanthropy Public welfare activities
Charitable donations
ESG Work Team Operational Body Fulfilling social responsibilities Providing jobs
Responsible for the execution and implementation of all ESG ini- Community
tiatives under the guidance of the ESG Leadership Team
Fair competition
Promoting the development of the Industry association meetings
health industry Experience-sharing sessions
Luoxin Pharmaceutical ESG Governance Structure Diagram Peer Organizations and Realizing the sharing of technology and Field research and exchanges
Associations expertise among companies
12 132025 Environmental Social and Governance (ESG) Report ESG Governance
Dual Importance Topic Analysis
The Company refers to the Shenzhen Stock Exchange Listed Companies Self-Regulatory Guidance No. 3 — Preparation of Sustain-
ability Reports (Revised in 2026) Shenzhen Stock Exchange Listed Companies Self-Regulatory Guidance No. 17 — Sustainability Re-
ports (Trial) as well as regulatory requirements for the pharmaceutical industry. Adhering to the principle of dual importance anal-
ysis the Company conducts a systematic identification and evaluation of sustainability topics. The specific process is as follows: Dual Importance Topic Matrix
Topic By integrating national pharmaceutical regulatory policies environmental protection standards Product Quality and Safety
Identification industry association guidelines and the unique characteristics of the pharmaceutical sector and Employees Business Ethics and Anti-Corruption
drawing on domestic and international ESG frameworks and practices we systematically review Information Security and Privacy Protection Innovative R&D
key topics such as quality and safety of medicines environmental compliance supply chain sus- Environmental Management Product Accessibility
tainability employee health and safety and innovation and R&D to establish a comprehensive list Internal Control Risk Management
of sustainability topics covering all aspects of the Company's operations. Resource Utilization Response to Climate Change
Occupational Health and Safety
Operational Compliance Supply Chain Management
Information Disclosure Customer Service
Investor Relations
Comprehensive Through research and interviews we have extensively gathered insights from various stakehold-
Leadership in Party Building
Research ers regarding their key concerns and expectations on topics such as pharmaceutical quality con- Intellectual Property Protection
trol environmental emissions supply chain compliance and the protection of employee interests. Public Welfare and Charity Emissions and Wastes Management
Importance Conduct a quantitative analysis and qualitative assessment of the survey results. By considering the
Analysis extent of each topic's impact on the Company's operations and stakeholders the probability of risks
occurring and industry regulatory priorities we weigh the financial implications against the social
value of each topic to determine their order of importance. This process identifies product quality
and safety environmental management and supply chain management as important topics. Importance to Luoxin Pharmaceutical
Environmental Social Governance
Matrix Based on the results of the topic importance analysis we develop a Sustainability Topic Impor-
Disclosure tance Matrix which is incorporated into the Company's ESG report for external disclosure. These
important topics serve as the core focus for subsequent ESG management practice optimization
and information disclosure driving the ongoing implementation of relevant initiatives and the
enhancement of their effectiveness.
1415
Importance to Stakeholders2025 Environmental Social and Governance (ESG) Report About the Report
01 Green Transformation，Building a Beautiful Home Together
Environmental Management System 18 In response to the United Nations Sustainable Development Goals (SDGs)
Response to Climate Change 22
Green Operations 25
16 172025 Environmental Social and Governance (ESG) Report Green Transformation Building a Beautiful Home Together
Environmental Management System Environmental Education
To continuously strengthen the ecological foundation for ing mechanism and regularly conducts specialized skill train-
sustainable development the Company places high impor- ing and emergency drills to ensure that relevant personnel
The Company consistently prioritizes environmental protection in the pursuit of sustainable development actively responds to tance on fostering an environmental compliance culture are familiar with operating procedures and risk prevention
the national call for ecological civilization and strictly complies with a series of laws and regulations including the Environmen- and cultivating professional capabilities. On the one hand and control requirements. In 2025 the Company organized a
tal Protection Law of the People’s Republic of China the Air Pollution Prevention and Control Law of the People’s Republic of through multiple online and offline channels and platforms it total of 44 environmental protection training sessions reach-
China the Law of the People's Republic of China on Energy Conservation the Law of the People's Republic of China on Water makes consistent efforts to propagate and interpret national ing 2268 employee participations and totaling 170 training
Pollution Prevention and Control and the Law of the People's Republic of China on the Prevention and Control of Solid Waste and local environmental laws and regulations and integrate hours. This helped set up a comprehensive environmental
Pollution. It has established and continuously improved its environmental management system through high standards and ecological and environmental protection concepts into rou- training system with key points highlighted and learning
strict requirements in an effort to reduce the environmental impact of its production and business operations to the greatest tine management thereby effectively enhancing the legal and practice integrated thereby providing a solid guarantee
extent possible. awareness of all employees and their sense of environmental for the Company’s green operations and compliant devel-
responsibility. On the other hand targeted at key positions opment.In 2025 the Company’s environmental protection
Environmental Compliance Management involving the operation of environmental protection facilities investment reached RMB 14.0132 million primarily used for hazardous waste management and environmental monitor- facilities operation and maintenance technological transfor-
ing the Company establishes a systematic and routine train- mation testing and monitoring training and drills etc.Environmental Management System
The Company has developed a comprehensive environmental management system covering four major areas i.e. water air
noise and waste (including hazardous waste) which is systematic clearly structured and has well-defined responsibilities. 44 Person-Time(s) 2268 time(s) 170 Hour(s) RMB14.0132 millionIn terms of its management philosophy the Company has established the core principle of “prevention first integration ofprevention with control and comprehensive management” and has vigorously promoted clean production and whole-process
pollution control to achieve the goals of compliant pollutant discharge and total emission control. With regard to the organi- Number of environmen- Number of employees Total duration of envi- Environmental Protection
zational structure the management system implements an environmental protection target-oriented responsibility system tal protection training trained in environmen- ronmental protection Investment
and clearly designates the head of the Company as the primary person responsible for environmental protection the Safety sessions tal protection training sessions
Supervision Office (EHS Department) as the centralized management unit responsible for company-wide environmental super-
vision monitoring file management and external coordination and heads of production workshops and departments as direct
persons responsible for environmental management within their respective areas thereby forming a top-down management
and control network with clearly defined responsibilities and authorities.To ensure the effective operation of the management Environmental Training
system the Company has established corresponding systematic implementation and guarantee mechanisms. Case
In terms of the Company regularly commissions qualified third-party organizations to monitor environmental fac- On June 15th 2025 the Company organized a specialized educational activity regarding environmental protection
monitoring and tors such as water air and noise and records the operation data of environmental protection facilities and safety warnings during which employees together watched an educational video on environmental safety
compliance in an accurate and comprehensive manner to ensure emissions comply with laws and regulations. warning associated with hazardous waste. Through real case analyses the initiative profoundly illustrated the
environmental safety risks and legal consequences that can result from improper hazardous waste management.Regarding risk
prevention and comprehensive environmental accident emergency response plans are formulated to strengthen emer-
Using these cases as warnings and catalysts for improvement the initiative guided all employees particularly
control gency response and handling capabilities.those in relevant positions to firmly establish a bottom-line mindset strengthen their sense of responsibility and
drive the systematic enhancement of the Company’s environmental safety management level and emergency
With regard to response capabilities.supervision and detailed rules for environmental protection assessments based on performance metrics have been
accountability established to realize effective controls and improvements.Under this framework the Company establishes clear measurable environmental goals that is ensuring the compliant oper-
ation of all pollution control facilities achieving standardized management of all types of waste unwaveringly pursuing 100%
compliance in the discharge of wastewater and waste gas generated in the course of production and 100% compliance in the
control of boundary noise and simultaneously committing to enhancing resource recycling levels by setting and striving to
achieve a 100% rate for the resource recovery and contracted disposal of solid waste.The Company’s production and business operations strictly comply with national and local environmental protection laws and
regulations. In 2025 the Company did not incur any administrative penalties resulting from environmental incidents and its
environmental management system operated smoothly and effectively.Environmental Safety Warning Education on Hazardous Waste
Environmental Emergency Management
The Company strictly complies with laws and regulations such as the Work Safety Law of the People’s Republic of China the
Regulations on Emergency Response to Work Safety Accidents and the Environmental Emergency Management Measures.Guided by the principle of “prevention first and integration of prevention with emergency response” the Company establishes
a comprehensive environmental emergency management system covering the entire chain of environmental risk identification
contingency plan management organization and command supplies guarantee training and drills emergency response and
evaluation and improvement which continuously enhances its capabilities in prediction and early warning of environmental
emergencies as well as its rapid response and scientific response capabilities.Environmental Management System Certificates
18 192025 Environmental Social and Governance (ESG) Report Green Transformation Building a Beautiful Home Together
Emergency Response Plan System
Case Emergency Drill for Ethanol Leakage AccidentThe Company has established a three-tiered emergency response plan system comprising “comprehensive emergency re-sponse plan specialized emergency response plan and on-site response plan” to ensure seamless coordination and consis-
tency of plans across all levels. Comprehensive emergency response plans are compiled revised and reviewed by the main On June 18th 2025 the Company organized an emergency drill for an environmental incident resulting from etha-
responsible persons of each holding company and wholly-owned subsidiary and is submitted to the Safety Supervision Office nol leakage. This drill simulated a typical accident scenario to comprehensively test the entire emergency response
for unified filing and management. Specialized emergency response plans are developed by functional departments to ad- process from early warning response to post-incident recovery. This realistic simulation effectively enhanced the
dress key risks such as major hazard sources special equipment and hazardous chemicals while on-site response plans are risk awareness and practical skills of all personnel improved the operational feasibility of emergency response
formulated by each workshop based on specific operational activities and hazardous targets. The Company implements dy- plans and interdepartmental coordination and further optimized safety and environmental risk control measures
namic management of emergency response plans organizing a comprehensive assessment and revision at least once every thereby providing strong support for ensuring personnel safety environmental risk prevention and the Company’s
three years. When there are significant changes in the relevant laws and regulations organizational structure risk sources or stable operations.emergency resources or when major deficiencies are identified during plan drills or actual incidents the Company immediately
initiates temporary review and revision procedures to ensure the plans are applicable scientific and workable.Emergency Response Organization
The Company has established an Emergency Response Command Center for Environmental Emergencies to provide unified
leadership and coordination of emergency response efforts. Specialized teams are set up under the Command Center includ-
ing the On-Site Response Team Emergency Support Team and Environmental Emergency Monitoring Team each with clearly
defined responsibilities and rapid response capabilities. The Safety Supervision Office (EHS Department) serves as the central-
ized emergency management unit responsible for filing emergency response plans routine management supervising drills
and coordinating emergency resources. The heads of each workshop and department serve as the primary persons responsible
for emergency management for their respective areas ensuring that emergency responsibilities are implemented at every
level among all personnel.Risk Control and Early Warning On-Site Response Drill for An Ethanol Leakage Accident
The Company systematically identifies environmentally hazardous substances and potential risk sources across production
storage and transportation processes determines risk levels for each unit and establishes a tiered early warning and emer-
gency response mechanism to achieve end-to-end dynamic risk control. In terms of prevention and monitoring real-time mon-
itoring of key areas is conducted through routine inspections video surveillance and automatic monitoring to enable early de- Case Comprehensive Emergency Drill for Acetone Leakage and the Resulting Fire
tection and resolution of risks. The early warning and reporting mechanism clearly defines the responsible persons throughout
the entire process and establishes information reporting procedures to ensure timely and accurate information transmission.On June 27th 2025 the Company organized a comprehensive emergency drill for an acetone leakage and fire
accident. An emergency command center was established for the drill comprising a communications team an
Emergency Supplies Support emergency response team an on-site rescue team a medical aid team and an evaluation team. Responsibili-
ties were clearly defined for information reporting leakage control security and evacuation casualty care and
The Company has established a mechanism for emergency supplies reserve and support. Based on laws regulations and risk process evaluation. The drill simulated the acetone leakage from the storage tank V1110A that ignited due to
assessment results the Safety Supervision Office (EHS Department) regularly proposes procurement plans for emergency static electricity. At 8:30 a.m. the inspection personnel discovered the leakage raised the alarm and closed the
supplies which are approved by the main responsible persons of each holding and wholly-owned subsidiary and uniformly pro- tank bottom valve; at 8:33 a.m. the on-duty person-in-charge activated the workshop-level emergency response
cured by the Procurement Department. Upon arrival of the supplies the Safety Supervision Office (EHS Department) conducts plan; at 8:35 a.m. as the situation escalated the Chief Commander activated the company-level comprehensive
inventory checks registers the supplies ensures proper storage and maintains a management ledger for emergency supplies. emergency response plan. The emergency response team put on positive-pressure breathing apparatus to enter
Various types of emergency supplies including those for typhoon and flood prevention snow removal firefighting and first the scene used foam to extinguish the fire and closed surrounding valves; the on-site rescue team evacuated
aid are stored according to designated categories at dedicated storage locations. The departments where these storage lo- personnel and connected fire hoses to assist fire trucks; the medical aid team transported simulated casualties on
cations are situated are responsible for daily inspections and maintenance. The Safety Supervision Office (EHS Department) stretchers. At 8:52 a.m. the open flames were extinguished and the leaked materials were fully collected. At 9:00
regularly inspects the types quantities expiration dates and usage status of these supplies to ensure they are readily avail- a.m. the Chief Commander declared the drill concluded. The evaluation team conducted a quantitative assess-
able sufficient and reliable at all times. The Finance Department has established a dedicated emergency fund account which ment across 12 dimensions including early warning response command and coordination and resource support
is used exclusively for emergency purposes to ensure the timely renewal and replenishment of supplies. and overall rated the drill as “Excellent”. For improvements listed in the section of “coordination among emergency response teams needs strengthening” the team proposed measures such as conducting regular multi-departmen-
tal joint drills and enhancing training on emergency response plans which were incorporated into the next year’s
Emergency Training and Drills emergency response work plan.The Company incorporates emergency knowledge and skill training into its annual safety and environmental protection train-
ing plan and regularly organizes personnel at all levels to study emergency response plans response procedures and how to
use protective equipment. For typical scenarios such as leakage fire and excessive emission the Company has formulated
and refined on-site response measures including personnel rescue leakage sealing pollutant control and emergency moni-
toring to ensure precise and effective emergency responses. It also conducts routine training and practical drills annually to
continuously enhance its emergency response capabilities.The Company attaches great importance to the development of safety and environmental emergency response capabilities.In 2025 a total of 14 environmental emergency training sessions were organized with 519 employee participations and 46
training hours in total. During the same period the Company also held 15 environmental emergency drills with a total of 537
participations. Through systematic training and practical drills the Company has effectively enhanced employees’ emergency
response awareness and their capabilities in addressing emergencies thereby laying a solid foundation for the Company’s safe
production and environmental protection.Comprehensive Emergency Response Drill for Acetone Leakage and the Resulting Fire
20 212025 Environmental Social and Governance (ESG) Report Green Transformation Building a Beautiful Home Together
Response to Climate Change Risk Type Risk Description Impact Response
Tighter carbon emis- Rising compliance costs: It is required to increase Improve environmental
Policy sion regulations and investment in personnel and technology used for management systems heightened disclosure carbon emission accounting monitoring and re- and enhance climate
Against the backdrop of the ongoing deepening of the global climate governance framework the vigorous advancement of the requirements porting to meet regulatory disclosure requirements. disclosure capabilities
“dual carbon” strategy and the increasing requirements for ESG disclosures in capital markets climate change has become an
integral part of corporate sustainability. Luoxin Pharmaceutical pays close attention to the long-term impact of climate change Increased low-carbon Impact on product and brand competitiveness:
on its business environment. Considering the characteristics of the pharmaceutical manufacturing industry it has conducted requirements from Green low-carbon products are more favored by Promote green produc-
preliminary identification and analysis of climate-related risks and opportunities. Based on its existing environmental manage- Market downstream custom- the market while high-carbon products become tion and enhance ESG
ment framework it plans to promote greenhouse gas management step by step thereby laying a solid institutional foundation Transition ers and investors less competitive and brand image is damaged.management
for orderly realizing a green and low-carbon transition. Risk
Accelerated iteration Increasing costs of technology upgrades: Existing Promote energy-saving
Technology of low-carbon tech- energy-intensive equipment and processes require
technological upgrades
Climate Risk and Opportunity Identification nologies retrofitting or phasing out necessitating investment and optimize equip-in R&D and equipment upgrades. ment structure
At the governance level the Company has systematically established a framework covering key areas such as energy man-
agement pollution prevention and control equipment operation and environmental protection facilities forming a complete Public attention on ESG rating and brand reputation risk: Poor perfor- Enhance information
closed-loop management mechanism that spans from policy development and process control to performance appraisal. By Reputation corporate perfor- mance in carbon emissions will lower the ESG rating transparency and
deploying a digital energy management platform it has achieved real-time online monitoring and precise data aggregation of mance in carbon emissions and trigger negative media and public sentiment.strengthen green brand
building
major energy consumption providing a solid data foundation and capacity reserves for systematic greenhouse gas emission
accounting and carbon management in the future.At the strategic level grounded in current production and operational realities the Company integrates the concept of green
development into every aspect of operational management and steadily advances related initiatives focused on energy con-
servation consumption reduction and environmental compliance: Major Climate Opportunities and Actions
Opportunity
Type Opportunity Description Potential Value ActionStrengthen the foundation of digital energy management
The Company has deployed an intelligent energy management platform to enable online monitoring and data Operational Establish an energy management
aggregation of major energy consumption providing support for subsequent energy efficiency analysis and ener- Efficiency Improvement of energy efficiency Decrease in unit product costs platform and optimize the energy
gy-saving technical upgrades. Opportunity utilization structure
Promote production process optimization and energy-saving technical upgrades Technology Up- Application of energy-saving equip- Improvement of production Promote boiler system optimization and
The Company actively explores effective pathways for regional energy coordination and cross-enterprise resource grade ment and clean technologies efficiency and green level steam recycling
recycling with a focus on reducing energy consumption and operating costs. Opportunity
Market Growing demand for green products Enhanced market Strengthen the development of the
Opportunity
Major Climate Risks and Responses and low-carbon supply chains competitiveness green manufacturing system
Financing More emphasis placed on ESG Optimized financing Improve the quality of climate-related
Risk Type Risk Description Impact Response Opportunity performance by capital markets environment disclosures
Facilities damage: Typhoons floods and other events may directly Brand Increased public awareness of Improvement of Deepen the dissemination of the green
damage the Company’s facilities such as production bases and ware- Opportunity green consumption company image development concept
houses leading to equipment failure and structural damage which in
turn disrupts production and operations. Strengthen disaster
Frequent occur- prevention and miti-
rence of extreme Impairment of product quality: Typhoons may damage factory roofs gation facilities on the
weather events and windows while floods may inundate warehouses in low-lying ar-Acute factory premises and (torrential rain- eas causing medications to become damp or spoil. enhance equipment
heatwaves Supply chain disruptions: Physical climate risks may impact the Com- weather resistance
typhoons) pany’s supply chain such as disruptions in raw material supply or the and emergency man-
closure of transportation routes due to extreme weather in production agement capabilities
regions resulting in delayed raw material deliveries or the failure to
Physical deliver finished products to customers on time thereby affecting the
Risk Company’s production and sales plans.Rising costs: Pharmaceutical production requires a large quantity of
water used for equipment cleaning drug preparation etc. Water short-
age or deteriorating water quality caused by climate change may af- Improve energy effi-
Rising tem- fect production schedules and increase water treatment costs; ciency and strength-
Chronic perature and
en water conserva-
Declining operational efficiency: High temperature may affect em-
water resource tion and recycling ployees’ productivity and health increasing labor costs of the Com-
pressure systemspany;
Product stability risk: High-temperature environment may affect drug
stability particularly for temperature-sensitive products (such as bio-
logics) potentially leading to drug degradation or a shortened shelf life.
22 232025 Environmental Social and Governance (ESG) Report Green Transformation Building a Beautiful Home Together
Greenhouse Gas Management Green Operations
Based on actual production and operations the Company’s greenhouse gas (GHG) emissions primarily stem from the consump-
tion of purchased electricity and the combustion of natural gas. Luoxin Pharmaceutical incorporates climate change-related
indicators into its data collection scope and regularly discloses relevant data to enhance transparency. During the reporting
period climate change-related indicators are shown in the table below: Energy and Water Management
Key Performance
Luoxin Pharmaceutical regards the intensive and efficient use of resources as the kernel of its green operations. Focusing on
four dimensions i.e. digital energy management the application of green and low-carbon technologies systematic improve-
Key Performance Unit FY2025 Data ment of energy efficiency and regional energy coordination the Company makes continuous efforts to build a resource uti-
lization management system that covers the entire energy consumption process. By implementing institutional measures for
water and energy conservation it continuously improves the efficiency of energy and water resource utilization.Scope 1 GHG emissions1 tCO?e 9179.83
Scope 2 GHG emissions2 tCO?e 30506.82
Total GHG emissions(Scope 1 and Scope 2) tCO?e 39686.65
GHG emission intensity tCO?e/RMB 10000 17.46
1Scope 1 emissions include greenhouse gas emissions from sources directly owned or controlled by the Company which are
primarily direct emissions of fuels such as natural gas. Emission factors are sourced from the National Greenhouse Gas Emis-
sion Factor Database.2Scope 2 emissions consist of indirect emissions from purchased energy. Emission factor data for electricity is sourced from the
average emission coefficients of the State Grid.Energy Management System Certificates
The Company’s current greenhouse gas management is primarily reflected in the following areas:
In terms of energy management
An energy management platform has been established to enable digital monitoring of energy consumption includ-
ing electricity. The Company has deployed an intelligent energy management platform to enable online monitoring and data
Energy-saving measures have been implemented such as the recovery and reuse of waste steam and the recycling aggregation of major energy consumption such as electricity. This platform covers key energy-consuming units
of boiler condensate water. across all major production sites which provides systematic support for subsequent energy efficiency benchmark-
ing and energy-saving potential exploration through real-time data collection and trend analysis. In 2025 the
Green office practices have been promoted to raise awareness of electricity and water conservation; Company’s electricity consumption was 57494944.45 kWh a year-on-year decrease of 23.56% while natural gas
Environmental protection facilities have been upgraded to reduce pollutant emissions. consumption was 4595347.00 m3 a year-on-year decrease of 39.55%.In the future the Company will closely align regulatory policy directions with its corporate sustainable development strategy
continuously refine its climate management framework and consistently enhance its capacity and management proficiency
for addressing climate change. Based on existing management systems and resource conditions it will advance these efforts
in a practical and traceable manner organically integrating energy conservation and consumption reduction with production
efficiency improvement. While ensuring compliant operations it will continuously strengthen its capabilities for green and
low-carbon development and enhance its long-term competitiveness.Energy Management Platform Electricity Conservation Slogan
24 252025 Environmental Social and Governance (ESG) Report Green Transformation Building a Beautiful Home Together
With regard to process energy-saving technologies
Implementing Inter-Factory Steam Supply and Demand Cooperation to Explore New
the Company continuously improves energy efficiency through technology innovation and process optimization. Case Pathways for Regional Energy Coordination and Carbon Reduction
In recent years Luoxin Pharmaceutical has successfully developed and applied core green and low-carbon tech-
nologies such as drug freeze-drying and solvent crystallization technologies. Among the technologies the solvent
crystallization technology realizes the efficient recovery of organics through high-purity separation. While reducing To respond to the local government’s call for coordinated development of the industrial chain and promote the
production costs its sealed operation effectively minimizes the environmental impact of solvent volatilization. In organic integration of graded resource utilization with cost reduction and efficiency improvement HENGXIN Phar-
addition the Company has implemented process improvement projects such as vacuum pump upgrades refrig- maceutical reached strategic cooperation with Shandong Chenhong Intelligent Technology Co. Ltd. regarding
eration plant renovations and the recovery and reuse of exhaust gas from distilled water machines effectively steam supply and demand in 2025 which was based on the “four-pronged” industrial chain task force of the
achieving energy conservation consumption decrease and emission reduction. The recovery and reuse project of Feixian Economic Development Zone. The two parties established a joint work team and clarified the division of
exhaust gas from distilled water machines not only reduces the emission of hazardous substances but also con- responsibilities regarding pipeline construction steam metering and emergency liaison. The project commenced in
serves water resources for the Company and improves the overall efficiency of resource utilization. the second quarter of 2025 involving the laying of 3.98 kilometers of dedicated steam pipelines to channel surplus steam generated during Chenhong Technology’s production process into HENGXIN Pharmaceutical’s plant sites
as a replacement of the steam produced by natural gas boilers and used for production heating and equipment
preheating.Regarding water management The project adopts a commercial operation modelbased on “volume-based billing and monthly set-tlement” and standardizes the criteria for steam
quality pressure and metering. Upon project
the Company strictly adheres to the requirements of laws and regulations such implementation HENGXIN Pharmaceutical is ex-
as the Water Law of the People’s Republic of China and the Law of the People's pected to save approximately RMB 5 million an-
Republic of China on Water Pollution Prevention and Control integrating the con- nually in steam costs significantly reducing nat-
cept of water conservation into daily operations and management. It continuous- ural gas consumption and carbon emissions and
ly strengthens all employees’ awareness of water conservation by posting water Chenhong Technology will resolve issues related
conservation slogans in office areas production workshops and public spaces to steam venting waste and noise pollution. This
as well as conducting regular water usage inspections. In 2025 the Company’s project represents the first large-scale practice
water consumption totaled 684418.37 tons a year-on-year decrease of 22.30%. of graded steam utilization between pharma-
Water for all plant sites is primarily from municipal water supply used as pro-
Water Conservation Slogan ceutical manufacturing and mechanical process-duction process water equipment cooling and circulation water raw water for ing enterprises in Southern Shandong Province
purified water production and water for living and office needs. providing a replicable model for upstream and
downstream energy coupling across the industri-
al chain in the development zone. Steam Pipelines
Key Performance
Indicator Unit FY20251 FY2024 FY2023
Electricity consumption kWh 57494944.45 75215128.83 65497919.32
Case Advancing the Expansion and Renovation of Active Pharmaceutical Ingredients
Natural gas consumption m3 4595347.00 7601850.00 6702683.00 (API) Facilities and the Technology Upgrade of the Freeze-Drying Workshop and
Systematically Planning Pathways for Energy Efficiency Improvement
Water consumption T 684418.37 880795.27 814884.50
To implement the strategic deployment of “improving quality enhancing efficiency and reducing costs” Luoxin1Excluding subsidiaries that have been disposed of Pharmaceutical raised funds through a private placement in 2025 and included the “Project on the Expansion and Renovation of Active Pharmaceutical Ingredients (API) Facilities and the Technology Upgrade of the Freeze-DryingWorkshop” into key investment priorities.Case Shandong Luoxin Was Honored as a “National Green Factory” The project involves a planned investment of RMB 475.67 million and will implement systematic technology up-grades centered on the automation upgrade of the API production system and the iteration of key equipment in
the freeze-drying workshop. The project implementation plan includes: first implementing continuous and sealed
transformation of existing API production lines to improve material yield and batch consistency; second intro-Shandong Luoxin was successfully selected as a “National Green ducing highly efficient energy-saving freeze-drying units along with integrated optimization of the vacuum andFactory.” Organized by the MIIT this certification encompasses refrigeration systems; third establishing an energy management center to implement precise monitoring and
comprehensive standards including land use intensification harm- dynamic control of all energy-consuming units following the technology upgrades.less treatment of raw materials clean production waste resource
recycling and low-carbon energy utilization. This honor indicates In December 2025 the project obtained the environmental impact assessment approval document issued by the
that the Company is up to the standards of the national green Linyi Municipal Ecology and Environment Bureau and entered the preliminary design phase. Upon completion
manufacturing system in such aspects as low-carbon energy and the project is expected to significantly improve production continuity and overall efficiency achieve a substantial
resource utilization and efficient operational management and reduction in energy consumption per unit of product and provide critical support for the Company’s medium- and
highly affirms its commitment to the path of green development. long-term goals in energy efficiency improvement and carbon emission intensity control.Looking to the future it will continue to uphold the concept of
green development refine its green manufacturing system play a
leading and exemplary role and contribute to the green transfor-
mation and upgrading of the pharmaceutical industry as well as
the achievement of the national “dual carbon” goals. Announcement of the “National Green Factory” List
26 272025 Environmental Social and Governance (ESG) Report Green Transformation Building a Beautiful Home Together
Pollutant Emission Management
For fugitive emissions (from open-air facilities or workshops with fugitive emissions)
The Company strictly complies with laws and regulations such as the Law of the People's Republic of China on Water Pollution
Prevention and Control the Air Pollution Prevention and Control Law of the People’s Republic of China the Law of the People's
Republic of China on the Prevention and Control of Solid Waste Pollution and the Regulations of the People’s Republic of China
on the Prevention and Control of Noise Pollution and systematically establishes a comprehensive pollutant emission manage- The Company reduces the release of fugitive emissions through reduction at the source and process control. Pro-
ment framework comprising the Water Pollution Prevention and Control Management Measures the Air Pollution Prevention duction units prioritize sealed and continuous processes with feeding discharging and material transfer opera-
and Control Management System the Solid Waste Management System and the Noise Pollution Prevention and Control Man- tions conducted within sealed systems; raw material and product storage tank areas are equipped with breather
agement System which clearly define management responsibilities at all levels operational procedures and evaluation criteria valves and nitrogen blanketing systems and loading/unloading operations utilize sealed loading arms or vapor
to ensure that the entire pollutant emission process is controllable and compliant in all aspects. balancing pipelines; wastewater collection conveyance and storage systems remain sealed and units such as
regulating tanks and biological tanks at the wastewater treatment station are covered and sealed with any fu-
Water Pollution Prevention and Control gitive gas routed to odor control facilities. The Company prevents equipment leakage by strengthening routine inspections and regularly conducting leakage detection and repairs on dynamic and static sealing points such as
pumps valves and flanges and it continuously optimizes the standards for sealed operations in production stor-
Guided by the principle of “prevention first and integration of prevention with control” the Company develops a systematic age and loading/unloading processes to reduce fugitive emissions as much as possible.water pollution prevention and control system covering the entire process of wastewater generation collection treatment
and discharge. This system encompasses all types of wastewater including production and domestic wastewater implements
classified collection and centralized treatment and strictly prohibits unauthorized discharge.All major production sites of the Company are equipped with wastewater treatment facilities commensurate with their pro- Each workshop shall develop a specific emergency response plan for situations involving odorous emissions or waste gas emis-
duction capacity. Taking YUXIN Pharmaceutical as an example the wastewater treatment station has a designed treatment sions with a wide-ranging impact. In the event of an air pollution incident emergency response procedures must be initiated
capacity of 1000 m3 per day and employs a “physicochemical pretreatment plus biochemical treatment” process. Discharged immediately the Safety Supervision Office (EHS Department) must be notified simultaneously and control measures such as
water quality complies with the requirements of the “Wastewater Quality Standards for Discharge to Municipal Sewers” (GB/T reducing production load halting emissions and ensuring personnel protection must be implemented. The Safety Supervision
31962-2015). Each plant site is equipped with a wastewater treatment station and an online monitoring station to conduct Office (EHS Department) has the authority to inspect on-site pollution emission equipment and waste gas treatment facilities.
24-hour continuous monitoring of key indicators such as pH COD and ammonia nitrogen. Data is uploaded in real-time to the Each workshop shall truthfully report the operational status of facilities and emissions and actively cooperate with supervision
monitoring platform of the ecological and environmental departments. Upon detection of abnormalities emergency response monitoring and on-site verification. For pollution risks identified during inspections or pointed out by the Safety Supervision
procedures are immediately activated and discharge is halted to ensure wastewater meets discharge standards. Additionally Office (EHS Department) the responsible workshop shall complete rectifications within the specified time and provide written
the Company shifts the focus of water pollution prevention and control forward to the project construction phase requiring all feedback. In the event of facility failures or abnormal emissions the workshop shall promptly provide the Safety Supervision
new projects to undergo environmental impact assessment procedures and prioritizing the adoption of low-water-consump- Office (EHS Department) with a written explanation of the cause treatment measures and rectification plans to prevent the
tion and low-emission processes. The Company has established a system for routine inspections and preventive maintenance spread of pollution. The Company’s Detailed Rules for Environmental Protection Assessments incorporate the maintenance of
of wastewater treatment facilities. The Engineering and Equipment Department and the Safety Supervision Office (EHS De- waste gas treatment facilities regular replacement of activated carbon leak-free piping and the implementation of emer-
partment) at each plant site conduct regular inspections of pipelines tanks and equipment operation status according to their gency response plans into departmental performance assessments. Negative incentives are imposed for failure to replace
respective responsibilities promptly addressing potential leaks spills drips and seepage. As a result a comprehensive closed- adsorption media as required inadequate inspections and concealing or underreporting incidents.loop system for water environmental protection and management takes shape. In accordance with the monitoring frequency and items specified in the Pollutant Discharge Permit the Company commissions
In 2025 the wastewater discharge totaled 395602 tons. Wastewater from all plant sites of the Company undergoes pretreat- qualified third-party testing agencies to conduct regular monitoring of stacks and fugitive emissions at the plant boundary.ment at on-site wastewater treatment facilities before being discharged into the municipal sewer system and sent to central- Monitoring factors include particulate matter sulfur dioxide nitrogen oxides. In 2025 the Company’s air pollutant emissions
ized wastewater treatment plants for advanced treatment ensuring stable compliance with discharge standards. were as follows:
In 2025 the Company experienced no environmental emergencies resulting from water pollution and received no administra-
tive penalties related to water pollution prevention and control from ecological and environmental departments. Key Performance
Air Pollution Prevention and Control Indicator Unit FY2025 Data
Nitrogen oxide emissions T 5.17
For organized emissions
Sulfur dioxide emissions T 0.67
The Company’s primary sources of waste gas include process waste gas from the synthesis workshop malodorous Particulate matter emissions T 1.14
gas from the wastewater treatment station and flue gas from boiler combustion. Process waste gas is collected
via fume hoods or sealed ductwork treated using a combination of processes including bag-type dust collectors
water absorption alkali spray and activated carbon adsorption and then emitted through tall stacks. Production
links and rooms where dust is generated are equipped with dust collectors or vacuum systems. Production equip-
ment is fitted with built-in filtration devices and emissions are released only after undergoing two-stage treatment In 2025 the concentrations of both organized and fugitive emissions at all of the Company’s plant sites were below national
via both the equipment’s built-in filters and the workshop’s air filtration system. Boiler flue gas is treated using and local standard limits. No major air pollution incidents occurred and no administrative penalties related to air pollution pre-
low-nitrogen combustion technology and condensing economizers ensuring emission concentrations comply with vention and control were received from ecological and environmental departments.the limits set out in the Shandong Provincial Standard for Boiler Air Pollutant Emissions (DB37/2374-2018). Malodor-
ous gas from the wastewater treatment station is collected via a sealed system and flows to odor control facilities
where pollutants are removed using chemical scrubbing biofilters or activated carbon adsorption processes.
28 292025 Environmental Social and Governance (ESG) Report Green Transformation Building a Beautiful Home Together
Waste Pollution Prevention and Control
General waste
General waste primarily includes production waste (such as waste packaging materials waste cardboard boxes When transferring and disposing of hazardous waste the department that generates the waste shall complete a Hazardous
waste drug residues and waste culture media) domestic waste (such as waste office paper waste plastic and Waste Disposal Application Form. After obtaining multi-level approval the waste goes through procedures for entering the
swill from the cafeteria) and construction waste (such as excavated soil and construction debris). Each plant site warehouse. The warehouse keeper verifies the physical objects and jointly completes the Hazardous Waste Storage Record
implements classified collection and designated storage: waste packaging materials and waste cardboard boxes Form thereby finalizing the ledger entry. The Safety Supervision Office (EHS Department) organizes outsourced cleanup at
are transported to the waste packaging materials warehouse; waste drug residues are stored in the waste drug least once per quarter or annually entrusting qualified disposal entities to handle transportation and disposal. The department
residue silo; domestic waste is centralized at the domestic waste station; and construction waste is placed at strictly enforces the hazardous waste transfer manifest system establishes third-party management records and implements
temporary storage sites set up by the construction unit. To prevent discarded packaging materials from entering whole-process supervision over transportation disposal and the execution of transfer manifests. Each generation department
the market and being illegally reused the Company explicitly mandates that all intact packaging bags cardboard shall transfer hazardous waste to the hazardous waste warehouse at least once per month.boxes instruction manuals and labels for raw and auxiliary materials must undergo destructive processing before Additionally the Company has formulated the Hazardous Waste Emergency Response Plan and Accident Prevention Mea-
being sent to the waste station or the waste packaging materials warehouse. Waste culture media must under- sures which clearly define emergency organizational structure response procedures and reporting processes for environ-
go high-temperature high-pressure steam sterilization and inactivation before disposal. Recyclable general solid mental emergencies such as hazardous waste leakage and fire. The hazardous waste temporary warehouse and positions
waste (waste paper waste plastic waste glass scrap iron etc.) is handed over to waste recycling companies for generating the waste are equipped with emergency supplies such as absorbent pads chemical-resistant suits and emergency
resource recovery; domestic waste is treated by municipal sanitation departments in a centralized manner; and sand and emergency drills are conducted regularly each year. The Company’s Detailed Rules for Environmental Protection
construction waste is properly disposed of by the construction unit in accordance with the law. Each generation Assessments include actions such as incorrect classification of hazardous waste non-compliant packaging inaccurate ledger
department shall accurately record the volume transfer destination and disposal status of general solid waste entries and unauthorized mixing with general solid waste in the list of negative incentives imposing performance penalties
and keep relevant records available for inspection. on responsible departments and individuals. In 2025 all of the Company’s hazardous waste was disposed of in accordance
with laws and regulations. No environmental pollution incidents such as illegal dumping loss or leakage of hazardous waste
occurred and no administrative penalties related to solid waste pollution prevention and control were received from ecological
and environmental departments.Hazardous waste Noise Pollution Prevention and Control
The Company’s primary sources of noise include production equipment power units cooling towers material handling equip-
Hazardous waste shall be sorted and stored in special containers with warning labels affixed. It is temporarily ment etc. During the equipment selection phase low-noise models are prioritized and high-noise equipment is strategically
stored in a hazardous waste warehouse that is leak-proof spill-proof fire-resistant and well-ventilated which is positioned. Vibration reduction sound insulation and noise elimination measures are implemented for crushers air compres-
managed by designated personnel and locked up for better control. Prior to transfer and disposal a Hazardous sors fans water pumps and other equipment. During equipment operation operators strictly follow operational procedures
Waste Disposal Application Form shall be completed and storage procedures shall be followed. The Safety Super- to prevent noise exacerbation caused by improper operation. The Equipment Department regularly performs maintenance
vision Office (EHS Department) commissions a qualified third party to transport and dispose of the waste strictly servicing and lubrication on moving parts to reduce abnormal noise caused by equipment wear. Under normal operating
enforces the transfer manifest system throughout the process and sets up management ledgers. The Company conditions doors and windows in production workshops are kept closed to effectively prevent noise leakage. During material
also establishes emergency response plans for incidents such as hazardous waste leakage and fire equips itself handling personnel are required to handle items gently to avoid accidental collisions or throwing objects; wheel axles of hand-
with emergency supplies and conducts regular drills to ensure rapid response and timely reporting in case of emer- pulled carts are regularly lubricated and maintained and foreign objects adhering to the wheels are removed to reduce noise
gencies thereby effectively preventing the risk of environmental pollution. during the handling process.Boundary noise levels at all of the Company’s plant sites strictly comply with the Industrial Enterprises Boundary Environmental
Noise Emission Standard (GB 12348-2008). The Company strictly adheres to the monitoring frequency and items specified in
the Pollutant Discharge Permit commissioning qualified third-party testing agencies to conduct regular monitoring of boundary
Key Performance noise. All monitoring results meet the standard requirements. For construction projects within the plant premises the construc-
tion unit shall comply with the Boundary Environmental Noise Emission Standard for Construction Sites (GB 12523-2011) strictly
limit construction hours and prohibit high-noise operations at night. Construction noise emissions remain under continuous
Indicator Unit FY2025 Data control.The Safety Supervision Office (EHS Department) and workshop management personnel at each plant site include noise control
Non-hazardous waste generation T 955.41 facilities in their routine inspections and promptly arrange repairs for issues such as abnormal equipment wear poor lubrica-
tion and initiation of acoustic enclosures. The Company’s Detailed Rules for Environmental Protection Assessments incorporate
Hazardous waste generation T 353.36 the operational status of noise control facilities and the implementation of window and door closure requirements into depart-mental performance assessments.In 2025 daytime and nighttime boundary noise emissions at all plant sites continuously met the standards. There were no
Total waste generation T 1546.50 complaints regarding noise disturbances to residents and no administrative penalties related to noise pollution control were
received from ecological and environmental departments.Total recyclable waste1 T 237.73
1 Recyclable waste primarily includes waste glass scrap iron waste plastic waste paper and wood activated carbon gen-
erated during the production of purified water used air conditioner filter cartridges and filter bags and discarded packaging
materials.
30 312025 Environmental Social and Governance (ESG) Report About the Report
02 Innovation-led Developmentfor a Healthy Future
Innovation-Driven Industrial Upgrading 34 In response to the United Nations Sustainable Development Goals (SDGs)
Supply Chain Management 38
Product Responsibility and Quality Safety 40
32 332025 Environmental Social and Governance (ESG) Report Innovation-led Development for a Healthy Future
Innovation-Driven Industrial Key Achievements
Upgrading In March 2025：The new indication “prevention of stress ulcer bleeding in critically ill patients” for LX22001 for
Injection of Shandong Luoxin and Shanghai Luoxin was approved for clinical trials. No similar injection product of
LX22001 for Injection has been marketed globally. Luoxin Pharmaceutical's move into the P-CAB injectable formu-
Luoxin Pharmaceutical has established technological innovation as the core driver of its development. Through systematic lation will enrich the Company's gastrointestinal pipeline creating a synergistic effect between oral and injectable
strategic planning and sustained R&D investment the Company has built a solid foundation for innovation. dosage forms. This differentiated strategy will strengthen its market position in the gastrointestinal therapeutic
area and secure a first-mover advantage in the upcoming generation of acid-suppressing therapies.In March 2025：Luoxin Aurovitas obtained the "Drug Registration Certificate" from the National Medical Products
R&D Management System Administration for the hydrochloride azaseridine inhalation solution (3ml: 0.31mg 3ml: 0.63mg 3ml: 1.25mg). This is equivalent to passing the consistency evaluation of quality and efficacy of generic drugs. This product is used
for treating or preventing bronchospasm caused by reversible airway obstructive diseases in adults and children
over 6 years old. It has the characteristics of rapid onset long-lasting efficacy high selectivity few side effects
Adhering to the strategy of developing the enterprise through science and technology the Company has established a col- and precise dosage. This approval for market launch will provide more medication options for the treatment and
laborative R&D structure consisting of the Headquarters Pharmaceutical Research Institute Shanghai Research Center and prevention of bronchospasm in China.Hengxin R&D Center which is supported by multiple high-level R&D platforms including the National Accredited Enterprise
Technology Center and Postdoctoral Research Station. In April 2025：Shandong Luoxin's "Common Key Technologies and Industrialization of Crystallization for Drugs
The scientific research platforms approved or awarded to the Company include the National Accredited Enterprise Technology such as Metformin Hydrochloride and Proton Pump Inhibitors" won the Second Prize for Science and Technology
Center National-Local Joint Engineering Laboratory National Postdoctoral Research Station Shandong Provincial Key Labora- Progress in Shandong Province. This project based on a national-level research platform and advanced pilot pro-
tory for Small-Molecule Targeted Drugs for Digestive System Diseases Shandong Province International Joint Laboratory for duction base has established a "fast track" for the smooth transformation of the crystal technology for proton
the Industrialization of Chemical Drugs Shandong Engineering Research Center for Solvent Crystallization Drugs Shandong pump inhibitors from the laboratory to the production line. It has successfully achieved high-quality industrializa-
Province "One Enterprise One Technology" R&D Center Shandong Province Overseas Talent Introduction Program Work Base tion of 5 varieties and over 10 specifications of proton pump inhibitor drugs.Shandong Province Public Training Base for New and Old Economic Momentum Transformation Shandong Province Pilot Pro-
duction Base for Small Molecule Chemical Drugs Taishan Scholar – Distinguished Expert Position in Pharmacy and Shandong In May 2025：Shandong Luoxin Ibuprofen Injection (4ml: 0.4g) was granted the "Drug Registration Certificate"
Academician Workstation all of which have built a stronger R&D platform for talent introduction scientific research develop- which is regarded as having passed the consistency evaluation of quality and efficacy of generic drugs. This
ment and process improvement and will further enhance the Company’s technological R&D strength and overall competitive- product is used for the treatment of fever in adults and is administered via intravenous injection. Compared to
ness. As of the end of the reporting period the Company has a professional team of 109 researchers with a cumulative R&D traditional oral preparations it bypasses gastrointestinal absorption and liver first-pass metabolism achievinginvestment of RMB 107.4839 million in 2025. Under the strategic planning of “long-term planning focusing on the present and peak concentration rapidly. Clinical studies have shown that body temperature significantly drops within 0.5simultaneous innovation and generic development” the Company has formed a virtuous cycle of “producing one generation hours after administration featuring a fast onset and clear antipyretic effect. It is particularly suitable for rapidreserving one generation and researching one generation” and continuously launches “three-high” products with high tech- antipyretic treatment in emergency departments ICUs and post-operative fasting patients providing a more ef-
nology content high quality and high added value. ficient antipyretic treatment option for clinical use. This approval further enriches the company's product line and enhances its market competitiveness.Luoxin Pharmaceutical has carried out long-term and stable industry-university-research cooperation with many universities
and research institutions effectively promoting the transformation of scientific and technological achievements into real pro- In July 2025：The "Research and Industrialization of Rare Disease Anti-Tumor New JAK Inhibitor" project of Shan-
ductive forces which has not only successfully developed numerous national-level new drugs to serve patients but also built a dong Luoxin was selected as a key research project of Shandong Province (Competitive Innovation Platform).strong product pipeline and technical barriers for the sustainable development of the enterprise. Ruxintilun phosphate as the first approved selective inhibitor of JAK1/JAK2 can effectively control the malignant
proliferation of myeloid cells by specifically blocking the abnormal activated JAK-STAT signaling pathway. It can
also regulate excessive inflammatory responses providing a better option for the treatment of rare and major
diseases such as myelofibrosis and acute graft-versus-host disease.Application of Technological Innovation In October 2025：The project “Key Technology Research and Industrialization of Ambroxol Hydrochloride Sprayfor Children” by Shandong Luoxin was successfully selected into the 2025 Shandong Enterprise Innovation
International certifications Achievement Promotion Catalog and won the First Prize of Technological Innovation Achievements. The product innovatively adopts metered oral spray administration technology which confirmed by the technical report of the
Center for Drug Evaluation of NMPA can effectively avoid risks such as spillage and vomiting of traditional oral
The company continues to deeply engage in drug research and development providing high-quality innovative results to safe- preparations achieve precise administration and significantly improve medication compliance in young children.guard public health. As the earliest Chinese manufacturer and licensor of inhalation aerosols to enter the US market Luoxin
Aurovitas has obtained the production site approval from the US Food and Drug Administration for the Levosalbuterol Hydro- In December 2025：The three indications (RE/DU/Hp) of Tegoprazan Tablets (Taixinzan) were included in the
chloride Nebuliser Solution. "Dual filing in China and the US" not only demonstrates the outstanding R&D capabilities of Luoxin National Medical Insurance Work-related Injury Insurance and Maternity Insurance Drug Catalog (2025) making
Pharmaceutical but also indicates that Luoxin Pharmaceutical's continuously improved quality management level has been in it the first potassium-competitive acid blocker (P-CAB) in China approved for three indications (RE/DU/Hp) with all
line with international regulatory standards. core indications included in the national medical insurance catalog.Product R&D In December 2025：The Department of Industry and Information Technology of Shandong Province issued the Notice on the Announcement of the List of the Ninth Batch of Shandong Provincial Manufacturing Single-Item
Champion Enterprises and Enterprises from the Third and Sixth Batches That Passed the Re-evaluation and Shan-
Luoxin Pharmaceutical’s R&D pipeline features a well-structured portfolio that effectively integrates generic and innovative dong Luoxin a subsidiary of Luoxin Pharmaceutical was successfully selected into the 9th batch while another
drug development. There were 20 projects in 2025 of which 3 were approved and 17 were core ongoing projects. The pipe- subsidiary YUXIN Pharmaceutical passed the 6th batch re-inspection. Ambroxol Hydrochloride for Injection has
line includes sprint-stage projects submitted for approval key-stage projects under process verification and BE studies and gained wide market recognition in the treatment of respiratory diseases due to its stable product quality and sig-
multiple projects in early stages such as laboratory and pilot tests covering the entire chain from early research to marketing nificant clinical efficacy. Tegoprazan Tablets a major product in the field of digestive diseases is the first domes-
application. This reflects the Company’s systematic R&D strategy that balances short-term returns and long-term development tically developed P-CAB in China approved for three indications with all core indications included in the national
and attaches equal importance to offensive and defensive development. medical insurance catalog and with comprehensive indication coverage and excellent clinical value it brings new
options for clinical medication and benefits more patients with innovative achievements.
34 352025 Environmental Social and Governance (ESG) Report Innovation-led Development for a Healthy Future
Intellectual Property Protection
Luoxin Pharmaceutical has formed a rigorous
management system with clear rights and re-
sponsibilities by establishing systems including
the Patent Work Management Measures the
Trademark Work Management Measures and the
Trade Name Work Management Measures. All de-
partments worked closely together jointly achiev-
ing the standardization systematization and nor-
malization of the entire process management of
intellectual property rights and passed the cer-
Public announcement of the National Medical Products Second Prize for Scientific and Technological tification of the intellectual property compliance
Administration (NMPA) Progress of Shandong Province management system (GB/T29490-2023). Intellectual Property Compliance Management System Certificates
Patent Management
The Company respects the intellectual property rights of others and prevents in-
fringement risks while actively protecting its own innovative achievements. Luoxin
Pharmaceutical adheres to equal emphasis on independent R&D and cooperative
R&D and promotes innovative drugs and generic drugs simultaneously and as of the 375 Item(s)
end of the reporting period the Company has been granted a total of 375 patents.In patent management the Company effectively controls patent infringement risks
and properly handles patent disputes and infringement issues in drug R&D to ensure Patent
the smooth progress of R&D projects. In addition the Company dynamically manages
patent assets through patent maintenance and monitoring removes business obsta-
cles through patent challenges and infringement responses. Meanwhile its reward
system for service inventions effectively stimulates employees’ innovation vitality.Patent Application Process:
The patent application process is initiated by business departments and organized by the Legal and Compli-
First Prize for Technological Innovation Shandong Provincial Manufacturing Single-Item ance Management Department. Relevant R&D personnel may discuss the patentability of R&D results with the
Achievements Champion Enterprise Legal and Compliance Management Department before initiating the application.When initiating a patent application the initiator shall fill in the Technical Disclosure Form or provide other
technical materials and obtain approval from the person in charge of the business department
The Legal and Compliance Management Department shall complete the drafting of patent application doc-
uments within a reasonable time and after the business department reviews the technical rationality and
confidentiality of the application documents it fills in the Patent Application Approval Form and obtains corre-
sponding approval according to the Patent Work Approval Authority Table and then the Legal and Compliance
Management Department submits the application to the Patent Office.Trademark Management
Trademark management focuses on comprehensive brand asset portfolio planning and risk prevention and control. The man-
agement process covers the entire life cycle from registration applications (including but not limited to strategic registration of
reserve joint and defensive trademarks) standardized internal use to external licensing and transfer.The Company attaches great importance to risk prevention not only requiring strict compliance with the Luoxin Pharmaceuti-
cal Visual Identity System Specification Manual in trademark use but also establishing a market monitoring mechanism to en-
courage employees to report infringements with corresponding rewards. At the same time the Company has clarified penalties
for illegal trademark use reflecting the management principle of equal rights and responsibilities.In line with its overall development strategy Luoxin Pharmaceutical has continuously strengthened its intellectual property
management system establishing a comprehensive intellectual property protection framework that covers the entire product
lifecycle. This not only strengthens the legal protection of core technologies but also enhances the enterprise’s market compet-
itiveness and lays a solid intellectual property foundation for high-quality sustainable development.
36 372025 Environmental Social and Governance (ESG) Report Innovation-led Development for a Healthy Future
Supply Chain Management Supply Chain Risk Management
In terms of supply chain risk management Luoxin Pharmaceutical has built a three-dimensional prevention and control system
with quality and safety as the core systems and processes as the guarantee and digital systems as the support.The supplier management of Luoxin Pharmaceutical is characterized by multi-department collaboration: the Procurement
Management Department takes the lead in the whole-process management; quality production R&D and other departments
provide technical support as demand departments; the Finance Department reviews the financial status of suppliers; and the
Legal and Compliance Management Department focuses on compliance risks. This structure ensures the professionalism of 01 Risk Screening and Assessment Management
management activities and the comprehensiveness of risk control.The Company comprehensively screens risks of legality performance capability and quality system through the Suppli-
er Basic Information (Qualification) Survey Form and launches an on-site inspection mechanism for high-risk suppliers
Supplier Lifecycle Management to form a Supplier On-site Investigation Report to evaluate production capacity stability and compliance foundation.In classified and graded management the Company dynamically divides cooperation relationship levels by combin-
ing material attributes (strategic/leverage/bottleneck/general) and the supplier perception model and quantifies risks
To standardize supplier lifecycle management Luoxin Pharmaceutical has formu- through annual performance evaluation. The performance evaluation form specifies indicators across four key dimen-
lated the Supplier Management System which ensures that suppliers meet the sions: quality cost delivery and service. Grade D suppliers (scoring below 60) trigger the elimination process directly
Company’s operational and development needs in terms of quality price delivery 1420 due to major quality or compliance issues. However sole-source suppliers must prioritize the addition of alternatives service and technology through systematic management. During the reporting pe- Supplier(s) before exit to mitigate the risk of supply disruption.riod Luoxin Pharmaceutical had 1420 suppliers.Total number of suppliers
02 Digital and Contract Management
Risk prevention and control in operation relies on a continuous monitoring mechanism; the Company has established a
Sourcing Luoxin Pharmaceutical sources suppliers through multiple channels such as data platforms indus- Supplier Relationship Management (SRM) system to standardize the management of order delivery and supplier per-
try exhibitions and new media; suppliers after preliminary screening shall register in the supplier formance. The Procurement Management Department regularly updates supplier qualification documents and the Fi-
relationship management system and submit basic materials including the Supplier Basic Informa- nance Department and Legal Department review financial health and litigation records respectively realizing real-time
tion Survey Form and compliance documents. monitoring and traceability of supply chain data and contract performance.Qualification and
collaboration Qualification and upgrade are critical control points. Registered suppliers must pass joint review by procurement legal finance quality and other departments and on-site inspection if necessary 03 Dealer and Sales Risk Control
before being upgraded to “qualified alternative suppliers”. To become a “qualified supplier” the
products of production material suppliers must pass sample inspection process verification and
stability studies and finally obtain filing or approval from the drug regulatory authority. Luoxin Pharmaceutical adopts a dynamic management model for dealer customers conducts a comprehensive assess-ment annually from sales performance warehousing and distribution payment collection and other aspects and decides
the continuation of cooperation according to the evaluation results. The Company ensures supply chain resilience by clar-
ifying logistics configuration after-sales response standards and emergency order processing procedures. All risk control
Evaluation Luoxin Pharmaceutical has introduced refined management tools to classify materials into four records are filed in the form of internal control documents to ensure traceable operations and confidential information.categories: strategic leverage bottleneck and general based on expenditure amount and supply
risk. Using the supplier perception model it classifies customers in the eyes of suppliers into core
type to-be-developed type and so on from the perspectives of “purchaser’s value to suppliers”
and “purchaser’s attractiveness to suppliers” and then determines strategic cooperative or gen-
eral relationships with suppliers. It regularly assesses suppliers according to the classification and 04 Quality and Compliance Management
grading results and divides them into four grades: A (Excellent) B (Good) C (General) and D (To be
eliminated). The evaluation results are directly applied to procurement decisions such as bidding In strict accordance with the Good Manufacturing Practice (GMP) Luoxin Pharmaceutical has established a sound qual-
guidance order allocation and payment policies. ity management system from raw material procurement production and manufacturing to transportation and storage
to ensure the quality and safety of drugs throughout their life cycle.Luoxin Pharmaceutical strictly abides by national environmental protection standards establishes a safe production
Elimination Luoxin Pharmaceutical continuously maintains supplier qualifications to ensure their validity. At management system and prevents the risk of supply chain interruption caused by environmental or safety accidents.the same time it has clearly stipulated an elimination mechanism; suppliers with major quali- At the same time it takes safety and environmental protection records as an important evaluation indicator for suppli-
ty problems performance problems commercial bribery and other situations will be subject to er qualification continuously monitors their compliance through annual supplier performance evaluation and adopts
elimination procedures and financial settlement and contract handover will be completed before strengthened control measures such as on-site inspection for suppliers with safety and environmental risks.elimination to control risks. Through the above multi-dimensional and whole-process risk control measures Luoxin Pharmaceutical effectively en-
sures the stability compliance and competitiveness of the supply chain providing a solid guarantee for the sustainable
operation of the enterprise.
38 392025 Environmental Social and Governance (ESG) Report Innovation-led Development for a Healthy Future
Product Responsibility and Product Quality Training
Quality Safety Centering on product safety and quality Luoxin Pharmaceutical has established a systematic quality capability development
system. Its training programs are closely aligned with pharmaceutical production regulations with a specific emphasis on
comprehensively deepening and implementing GMP. The internal training takes the “Quality Improvement Training Program”
Luoxin Pharmaceutical places patients’ medication safety at the core of corporate responsibility and has built an integrated as the main line systematically explaining the second edition of the GMP Implementation Guide covering key links such as
management system covering the entire life cycle of drugs deeply integrating quality safety and compliance. The Company analytical method verification deviation investigation (OOS/OOT) change control and sterility assurance. Meanwhile we orga-
promotes whole-process product management with high standards and systematization which not only protects public health nized interpretation sessions and cascading training focused on the additions and revisions in the 2025 edition of the Chinese
but also lays a solid foundation for the high-quality development of the enterprise. Pharmacopoeia ensuring our enterprise standards are fully aligned with national standards.Case Strengthening the R&D Quality System through Professional Training
To enhance drug R&D quality management capabilities and systematically establish a standardized R&D quality
control system the Company focused on improving professional competencies by organizing specialized lean
training sessions. On March 21st 2025 the Company's Quality Assurance Department conducted a specializedtraining session for Drug R&D QA personnel themed "Building a Drug R&D Quality System.” This training was cen-
tered on the Guidelines for Quality Management of Pharmaceutical Research of Chemical Medicines (Association
Standard T/SHPPA 001-2020). It focused on the requirements for establishing an R&D quality management system
thereby enhancing the professional competencies of Drug R&D QA personnel in building and implementing quality
systems and laying a solid foundation for quality control throughout the Company's drug development process.Case Focusing on Pharmacopoeia Standard Interpretation to Build a Strong Quality and Safety Line
From July 22nd to July 25th 2025 the Company’s quality director and compliance management department man-
Quality Management System Certificates ager participated in the on-site training on the interpretation of the 2025 edition of the Chinese Pharmacopoeia
hosted by the National Pharmacopoeia Commission. Through systematic learning key personnel have mastered
the technical standards and regulatory requirements of the new edition of the Pharmacopoeia laying a solid pro-
Product Management System fessional foundation for ensuring drug quality and safety and improving compliance management.Management System
Pharmacovigilance Management
The core of product and service quality management is to deeply integrate the concept of patient safety and compliance
governance into the whole process from R&D to post-marketing monitoring. We have established an integrated management
system in line with GMP standards comprehensively considering safety efficacy and quality control in the design and R&D Institutional Framework
stage strictly implementing quality management and supplier audit in production and supply chain links and strengthening
risk control through the pharmacovigilance system and whole-process quality traceability mechanism. This system not only
ensures the safety and reliability of products but also promotes the continuous improvement of the quality system through To effectively fulfill its responsibilities as a Marketing Authorization Holder (MAH) Luoxin Pharmaceutical has strictly adhered to
continuous collection and analysis of data such as medication safety and adverse reactions and ultimately achieves long-term the Good Pharmacovigilance Practices (GVP) and established a pharmacovigilance system covering the entire product lifecycle.responsibility for patients and sustainable development of the enterprise. The Company has established an independent Pharmacovigilance and Safety Management Department staffed with dedicat-
ed personnel focused on monitoring adverse drug reactions (ADRs) associated with marketed products. The Company places
the highest priority on patients’ medication safety promptly collecting feedback and implementing appropriate measures in
Product Recall response.The Company has established feedback channels through public platforms such as
its official website providing contact numbers fax numbers and dedicated email Pharmacovigilance and Safety After-sales service and product recall systems are central to fulfilling our social responsibility of prioritizing patient safety Management Department – Adverse
and ensuring rigorous compliant corporate governance. The Company has established a closed-loop process of customer addresses to healthcare professionals patients and the general public for the pur-
pose of receiving and collecting reports of adverse events related to the clinical use Event Reporting Contactfeedback and complaints covering all channels based on the pharmacovigilance system. We have also implemented active
monitoring and tiered recall mechanisms that exceed regulatory requirements ensuring the rapid identification assessment of medications.and transparent response to any potential product risks. This is not only to meet compliance requirements such as GMP and the These reporting channels operate under a unified framework that clearly defines the
Measures for the Administration of Drug Recall but also a key action for the Company to proactively manage risks throughout Tel: 0539-8242699scope and submission requirements guiding reporters to provide essential informa-
the product life cycle and ensure patients’ medication safety. Through systematic analysis of after-sales and recall data we tion—including the medicinal product name batch number symptom description
continuously drive the improvement of product quality and service and transform customer trust into the core driving force for Fax: 0539 -8242699and patient/contact details. This standardized approach establishes an open acces-
the sustainable development of the enterprise. sible and efficient pathway for collecting drug safety data ensuring potential risks Email: pv@luoxin.cn
In 2025 the Company had no safety and quality liability accidents related to products and services and no product recalls are promptly identified evaluated and managed to safeguard patients’ medication
caused by product and service quality problems. safety and enhance pharmacovigilance capabilities.
40 412025 Environmental Social and Governance (ESG) Report Innovation-led Development for a Healthy Future
Drug Safety Training Information Security Work
In terms of drug safety management the Company carries out systematic training around quality risks in the production process Luoxin Pharmaceutical places a high priority on information security and has established a comprehensive information security
covering key links such as clean area code of conduct microbial monitoring and pollution control strategies. The Company also management system. By combining technical safeguards with operational management the Company has built a comprehen-
enhances practical capabilities in pharmacovigilance and drug safety evaluation through external professional training compre- sive data security protection network.hensively strengthening organization-wide awareness of and competence in safety risk management. These specific measures and remarkable achievements fully reflect Luoxin Pharmaceutical’s professional ability and firm com-
mitment to information security governance providing a solid guarantee for the sustainable development and digital transfor-
mation of the enterprise.Case Drug Safety Monitoring Training
In July 2025 the Company actively participated in the national-level special training on drug safety and orga-
nized internal regulatory seminars. The Company strengthens the professional capacity building in key links such Technical Safeguards：The Company has deployed a new generation of anti-spam gateways with AI semantic de-
as drug safety detection evaluation and risk management plan through the guidance of external experts and tection models intercepting 134 million fraudulent emails throughout the year with an interception rate of 99.99%.selects professional personnel from the pharmacovigilance department to participate in the “Drug Safety Detec- Through coordinated perimeter WAF and IPS protection the Company effectively blocked 210 million external brute-tion and Evaluation Practice Class” held by the National Medical Products Administration to systematically learn force attacks and banned 870000 malicious IP addresses. The Company also implemented endpoint security mea-
cutting-edge technologies and practices of drug safety monitoring. This training has effectively improved the sures deploying over 5000 EDR agents and achieved zero successful ransomware infections throughout the year.professional ability of the pharmacovigilance team and laid a solid foundation for the Company to build a more
perfect drug safety monitoring and evaluation system. Account Security Management：The Company controls the proportion of weak passwords to a low level of 0.04%
through daily weak password scanning and a forced reset mechanism. The Company strictly enforces its offboard-
ing account revocation policy deactivating all 239 accounts of departed employees throughout the year—achiev-
ing a 100% revocation rate. It also regularly cleans up dormant (“zombie”) accounts to maintain a clean and secure
identity ecosystem.Data Security and Privacy Protection Vulnerability Management：The Company adopts a three-dimensional detection mechanism combining black-
box gray-box and code audit discovering and repairing 817 various vulnerabilities throughout the year. By deploy-
ing an IPS/IDS cluster with 38 nodes it has effectively blocked 570000 external attacks throughout the year with
Institutional Safeguards a 45% year-on-year increase in protection capability.Access Control：The Company strictly regulates the use of removable storage devices and cloud storage services
Luoxin Pharmaceutical takes information security as an important cornerstone of sustainable development and has built a to effectively mitigate the risk of data leakage. The Company has received dozens of external audits throughout
sound information security governance system. The Company has formulated and implemented the standard operating proce- the year and maintained an excellent record of zero defects in data security.dure of Basic Requirements for Information Security and built a comprehensive data security protection system through multi-
ple measures such as tiered access control device security management and network access control.Technical Controls: The Company implements a detailed six-tier IT permission template system enforces full-disk encryption and
domain-based management for computer devices and has established strict password policies and network isolation mecha-
nisms. At the same time the Company clearly standardizes operation processes such as software installation external device
use and data transmission eliminating potential safety hazards from the technical source. Green Server Room Empowering Low-Carbon Development
Operations Management: The Company has established a comprehensive incident response mechanism and conducts regular
access audits and employee security awareness training. Through systematic management measures and ongoing education Luoxin Pharmaceutical focuses on the green transformation of its data center infrastruc-
and outreach we continuously enhance our overall security capabilities to provide a solid foundation for the Company’s digital ture employing green and energy-saving technologies to drive low-carbon high-efficiency
transformation. operation of its server room and has established a green server room system that in-
tegrates both environmental benefits and practical value. This server room with a floor
The whole-process information security management system fully reflects the rigor and compliance awareness of the Company area of 80 square meters adopts an industry-leading enclosed micro-modular architecture
at the corporate governance level highlights the high importance attached to data security and compliant operation and pro- integrating modular UPS temperature and humidity monitoring with alarm functions and
vides strong support for the high-quality and sustainable development of the enterprise. a precision air conditioning system with underfloor air supply thereby creating an indepen-
dent controllable and highly efficient IT physical environment. At the core technology lev-
el full enclosure and isolation of hot and cold aisles eliminate air short-circuiting improving
cooling efficiency by over 40%; the modular UPS architecture enables on-demand deploy-
ment and load-adaptive adjustment maintaining system efficiency above 99%; and the
precise cooling technology combining underfloor air supply with enclosed cold aisles reduc-
es the PUE to below 1.35. After 12 months of actual operation the server room has demon-
strated a comprehensive energy-saving rate of 30% compared to traditional open-layout
server rooms saving approximately 180000 kWh of electricity annually—equivalent to a
reduction of 107 tons of carbon emissions—tangibly reflecting the Company’s commitment
to sustainable and green development. The Company’s server room
42 432025 Environmental Social and Governance (ESG) Report About the Report
03 Caring for Employeesand Promoting Social Harmony
Employee Interests and Development 46 In response to the United Nations Sustainable Development Goals (SDGs)
Employee Care and Well-being 48
Occupational Health and Safety 50
Social Contributions and Philanthropy 52
44 452025 Environmental Social and Governance (ESG) Report Caring for Employees and Promoting Social Harmony
Employee Interests and Development Employee Training
Luoxin Pharmaceutical regards employee training as a key measure for talent cultivation and long-term development and
continuously empowers employee growth and enterprise development through a multi-dimensional and systematic training
Talent enables effective leadership; talent drives business success. Talent is the Company’s most vital resource. Luoxin Phar- mechanism. The Company’s training covers a comprehensive and diverse range of content covering core fields such as pro-
maceutical adheres to recruiting diverse talents improving the talent cultivation mechanism and doing a good job in talent fessional ability management literacy safe production quality control post skills and general knowledge.acquisition training and appointment. The Company consistently regards employees as its core asset building a comprehen-
sive growth and support system that spans talent acquisition professional development and career advancement—driving The Company integrates employees’ individual strengths with the organization’s development needs adhering to the talent
harmonious mutually beneficial growth between the Company and its people. cultivation principle of “integrity and competence in equal measure.” Through systematic training and professional assess-
ments it supports employees in achieving their career development goals. The Company has developed a tailored onboard-
ing program for new hires covering corporate culture policies and procedures core professional skills and industry-specific
Employee Recruitment knowledge enabling them to quickly adapt to their roles and successfully transition into their new positions. Meanwhile the Company provides regular GMP training for all employees to ensure strict implementation of pharmaceutical manufacturing
quality standards. Furthermore through its “Xin” Talent Development Program series the Company continuously enhances
managerial leadership capabilities fostering synergistic growth between individual talent and team performance and has
The Company strictly abides by laws and regulations such as the Labor Law of the People’s Republic of China and the Labor established a comprehensive multi-tiered talent development system that spans from frontline employees to middle man-
Contract Law of the People’s Republic of China and formulates internal rules and regulations such as the Employee Handbook agement and executive leadership. In 2025 the Company achieved remarkable training results holding 196 training sessions
to ensure legal and compliant employment practices. The Company firmly opposes any form of employment discrimination in total investing RMB 153862.64 in training funds covering 6119 employees with a total training duration of 1641.01 hours.does not set unreasonable employment thresholds based on gender age ethnicity religious belief physical condition etc.always adheres to the principle of equal employment strictly prohibits illegal acts such as child labor and forced labor and
effectively safeguards the legitimate rights and interests of workers.Luoxin Pharmaceutical has always adhered to the principle that “talent is the primary resource” establishing a standardized
well-structured talent recruitment system that integrates diverse channels and fosters cross-functional collaboration. The Time(s) RMB Hour(s)
Company strictly implements its annual staffing plan. Hiring departments jointly develop the annual recruitment plan together 196 153862.64 1641.01
with the Human Resources (HR) department. Upon approval the HR department cen-
trally manages the entire recruitment process—including job posting resume screen- Number of training sessions Training expenses Total training hours of employees
ing interview coordination—and formally onboards candidates who pass the required
medical examination. The Company adheres to the principles of equal employment Person(s)
and merit-based recruitment clarifies basic employment conditions such as being 2962
over 18 years old and having no labor relationship disputes and focuses on selecting
outstanding talents with both ability and integrity honesty and trustworthiness and Total number of employees
development potential. As of the end of the reporting period the Company has a total
of 2962 employees. Case Professional Lean Training
In 2025 the Company continued to expand its campus recruitment and university-industry collaboration channels hosting 16
campus recruitment presentations and establishing partnerships with 18 higher education institutions. It organized 9 events
including career internships and symposiums under the national “Enterprise Visits for Job Creation” initiative and welcomed In July 2025 aligning with its operational and team development needs the Company organized a specializedvisits from 3 universities for exchange and dialogue. These efforts effectively facilitated precise alignment between universi- training session titled “Comparative Analysis and Discussion of Synthetic Processes for Different Proton Pumpty talent development and the Company’s hiring needs. The Company actively opens job opportunities to underrepresented Inhibitors (PPIs).” The training was delivered to all staff in relevant business functions providing a systematic
groups including recent graduates veterans and persons with disabilities. To date it has hired 25 veterans and 2 persons review and interactive discussion on common synthetic technologies key reaction characteristics and practical
with disabilities assigning roles based on individual capabilities to ensure optimal person-job fit and enable every employee to production applications—aiming to enhance participants’ technical expertise and professional competencies. The
fully realize their potential. professional lean training organized by the Company not only enhances the professional ability and collaborative
efficiency of the team but also provides strong support for the improvement of product quality and technological
innovation development of the Company.
45%2%37%
55% Employee Development
5%
30% Centering on the long-term development needs of talents Luoxin Pharmaceutical has built a dual-channel promotion system
By Education for employees providing clear and diverse growth paths for employees with different professional characteristics and devel-By Gender By Age opment intentions. The system is structured around two core tracks: the Professional Track and the Management Track. The
Level Professional Track focuses on deep expertise development in technical R&D and functional domains enabling employees to
progressively grow into recognized subject-matter experts or key business contributors through continuous enhancement of
their specialized competencies. The Management Track in contrast offers a structured progression pathway—from frontline
68% 58% supervision to senior executive leadership—for employees who demonstrate strong organizational coordination and team
leadership potential supporting their evolution into well-rounded management professionals.This scientifically designed dual-track system features clear career levels actively encouraging sustained specialization while
providing a transparent advancement route for those aspiring to management roles. Critically the two tracks remain inter-
Male Aged 29 and under Associate Degree and below connected allowing employees to transition between them in an orderly manner based on their evolving strengths and career
aspirations. This flexibility ensures that talent is fully leveraged career paths are genuinely optional and the organization is
Female Aged 30–49 Bachelor's Degree equipped with a sustainable pipeline of skilled professionals aligned with its strategic objectives.Aged 50 and over Master's Degree and above
46 472025 Environmental Social and Governance (ESG) Report Caring for Employees and Promoting Social Harmony
Employee Care and Well-being Employee Activities
Adhering to a people-oriented philosophy Luoxin Pharmaceutical places high value on corporate culture and employee care.By actively organizing diverse cultural and recreational activities such as sports meets and annual meetings we enrich em-
The Company is committed to providing employees with solid support and a broad platform for growth. Through a robust com- ployees' extracurricular lives and foster teamwork and emotional connection. These efforts create a positive inclusive and vi-
pensation and benefits framework a transparent career level system and human-centered employee care we comprehen- brant organizational atmosphere effectively enhancing staff belonging happiness and cohesion thereby injecting humanistic
sively safeguard employee rights unlock individual potential strengthen team cohesion and drive synergistic growth between momentum into the Company's sustainable development.employees and the organization—toward a shared future.Remuneration and Benefits Case 2025 Spring Sports Meet
Luoxin Pharmaceutical has established a scientific standardized fair and impartial salary management and performance
management system. The system is aligned with the Company’s strategic objectives and departmental goals and establishes In 2025 the Company held a Spring Sports Meet under the theme "Xin Vitality Yao Health" bringing together
comprehensive and well-balanced performance metrics tailored to each employee’s role and responsibilities. Performance 13 teams and hundreds of employees. The competition featured two main categories: individual contests and
evaluations encompass both business performance—such as work quality and efficiency—and holistic dimensions including team collaborations with each event designed to be both fun and challenging. Through competition and collab-
teamwork professional conduct and workplace values. Through a management mechanism characterized by clear objectives oration all participants vividly demonstrated the Company's spirit of striving for excellence perseverance and
and integrated processes we effectively motivate employees fairly recognize individual contributions and foster mutual camaraderie. This event not only helped employees relieve stress and showcase their talents but also effectively
growth between employees and the organization. strengthened team cohesion and corporate centripetal force injecting solid cultural momentum into the Compa-
Meanwhile the Company strictly abides by national laws and regulations such ny's sustainable and healthy development.as the Social Insurance Law and the Housing Provident Fund Management Reg-
ulations and has established a comprehensive welfare system that addresses
employees’ holistic needs. We duly contribute to employees’ social insurance and
housing provident fund in accordance with legal requirements and provide dai-
ly care benefits such as meal allowances transportation subsidies and welfare
housing. Furthermore through distinctive initiatives such as establishing union
relief funds offering internal discounts on pharmaceuticals and distributing holi-
day gifts the Company provides tangible support and thoughtful care across life
health and emotional dimensions. These efforts ensure that every employee feels
the genuine warmth of the organization. Employee benefits distribution
Case The "March 8th Red Pacesetter" Commendation Meeting
On March 7th 2025 the Company held a commendation
meeting to honor the "March 8th Red Pacesetters" where
the Company’s leaders presented certificates of honor to
the female award recipients. The award-winning represen-
tatives shared their growth and work insights fully demon- Case 2025 Annual Meeting — Radiating New Year Warmth
strating the dedication and responsibility of female employ-
ees in the new era. This event underscores the Company’s
commitment to valuing and supporting its female workforce. In January 2025 the 2025 Annual Meeting of Luoxin Pharmaceutical was successfully held. Themed "Resplendent
It serves to further strengthen team cohesion and inspire all Lights Gathering of 'Xin' Talents; Joyful Songs Welcoming the New Spring Walking Towards the Future Hand in
employees to demonstrate initiative and innovation in their Hand" the annual meeting created an atmosphere that was both solemn and warm. The event featured a wide
roles driving the Company’s high-quality and sustainable de- variety of activities including interactive sessions team-building exercises and lucky draws. With its rich content
velopment through dedicated action. and lively atmosphere the gathering effectively enhanced communication and collaboration among employees. This annual meeting further consolidated team strength fostered a positive corporate culture and injected pow-
erful momentum into the Company's development for the coming year.Open Communication
Luoxin Pharmaceutical attaches great importance to employee feedback and rea-
sonable demands. The Company is committed to continuously improving a diversi-
fied regular and institutionalized communication system ensuring that channels for
open dialogue remain accessible and effective. Through diverse channels including
company-wide proposals union and party committee email inboxes dining and ac-
commodation communication groups and the "Good Faith Negotiation" studio the
Company has established a comprehensive multi-level feedback platform. These
initiatives effectively safeguard employees' rights to information participation and
supervision fostering an open inclusive and harmonious working atmosphere.In 2025 the Company carried out two standardized employee satisfaction surveys
to comprehensively collect employees’ evaluations and suggestions on corporate Staff Representative Conference
cultural activities logistics services and other aspects. Survey results indicate that the overall satisfaction score for annual large-
scale corporate culture activities reached 86 with the individual sports meet achieving a high satisfaction rate of 96.
48 492025 Environmental Social and Governance (ESG) Report Caring for Employees and Promoting Social Harmony
Case Safety Production Month
Occupational Health and Safety In 2025 taking the “Safety Production Month” as an
opportunity Luoxin Pharmaceutical actively organized
various safety publicity and education activities. By
setting up a special publicity column for safety produc-
tion the Company systematically displays safety poli-
Luoxin Pharmaceutical has always prioritized work safety and occupational health. By establishing a systematic and standard- cies risk tips and emergency knowledge continuouslyized management system the Company continuously improves risk prevention mechanisms and strengthens safety aware- creates a good atmosphere of “everyone talks aboutness and emergency response capabilities across the board. This ensures the physical and mental well-being of employees and safety prevention is emphasized everywhere” further
operational safety laying a solid foundation for long-term and stable development. improves the safety awareness of all staff and consoli-
dates the foundation of corporate safety culture.Case Vehicle Injury Emergency Drill
In 2025 Lekang Pharmaceuticals organized a special emergency drill for vehicle injuries. The drill focused on
transportation safety risks inside and around the factory area simulated typical vehicle injury scenarios and sys-
tematically tested the emergency response process and on-site disposal capabilities. Through this drill the Com-
pany effectively fortified safety awareness among employees and enhanced the rapid response and collaborative
handling capabilities of relevant personnel. This provided valuable practical experience for continuously improving
the factory's safety management system and preventing traffic accidents in production operations.Occupational Health and Safety Management System Certificates
Safety Production Management System
Luoxin Pharmaceutical consistently regards safe production as a vital prerequisite for high-quality development fully imple-
menting safety responsibilities through the construction of a standardized and regulated management system. Based on
its specific production processes and risk characteristics the Company has formulated internal management regulations
including the Emergency Rescue Management System and the Regular Evaluation Management System for Emergency Plans.Building on this the Company further clarified job responsibilities and standardized workflows. It continuously improved a
full-chain management mechanism encompassing risk warning emergency response resource assurance and training drills.This formed a closed-loop safety management system characterized by "prevention first hierarchical responsibility and rapid
response" laying a solid foundation for stable operations from a systemic level.Supported by a robust management system the Company conducts regular risk inspections emergency drills and safety train-
ing. These efforts continuously strengthen safety awareness and emergency response capabilities across the organization
ensuring that safety management requirements are effectively implemented and yield tangible results. In 2025 the Company Case Emergency Evacuation Special Drillachieved zero production safety accidents.Occupational Health Management On December 8th 2025 the Company organized a special emergency evacuation drill in the office building aim-ing to test the effectiveness of the emergency plan and improve the safety awareness and emergency response
Luoxin Pharmaceutical attaches importance to the promotion and implementation of occupational health management. Ad- capabilities of all staff. The drill covered key procedures including the issuance of evacuation orders orderly
hering to the principle of “prevention first” the Company integrates the protection of employees’ occupational health into personnel evacuation assembly and roll call and a final debriefing. It also clearly defined the responsibilities of
daily management practices. By establishing and improving internal systems such as the Occupational Health and Safety the general commander safety officers and floor supervisors. By simulating a real fire scenario the drill further
Management System Specification it clarifies and implements systematic control measures including health monitoring labor strengthened employees’ disposal procedures for emergencies and provided a strong guarantee for the safe op-
protection and improvement of the working environment. Each production unit formulates practical operation objectives in ac- eration of the enterprise.cordance with the unified management framework such as strictly supervising the standardized distribution and use of labor
protection articles and regularly organizing occupational health examinations to effectively prevent occupational diseases.The Company is committed to continuously optimizing workplace conditions strengthening employees’ occupational health
training and risk awareness education so as to systematically control occupational hazard factors effectively protect employ-
ees’ physical and mental health and lay a solid foundation for the sustainable operation of the enterprise.Safety Training and Emergency Drills
Focusing on risk points in all links of production and operation the Company continuously carries out various safety training
and emergency drills. Through the combination of theoretical explanation and practical drills it continuously strengthens the
safety awareness and response capabilities of all staff. In 2025 the Company organized a total of 173 various safety training
sessions covering 25797 person-times with a 100% safety training coverage rate. Meanwhile 151 emergency drills were car-
ried out which effectively improved employees’ ability to identify potential safety hazards and handle emergencies rooted the
safety concept in their hearts and consolidated the safety foundation for production and operation.
50 512025 Environmental Social and Governance (ESG) Report Caring for Employees and Promoting Social Harmony
Social Contributions and Philanthropy Public Welfare
Luoxin Pharmaceutical firmly fulfills its social responsibilities actively conducts public welfare initiatives such as education
assistance programs continuously promotes the development of local education and the improvement of people's liveli-
Luoxin Pharmaceutical has always remained true to its founding vision and mission of “Delivering Health.” While focusing on hoods and well-being conveys corporate warmth through concrete actions and demonstrates its responsibility to give back
pharmaceutical innovation and safeguarding public health it actively fulfills its social responsibilities and enthusiastically en- to society.gages in public welfare charity and social service initiatives. The Company gives back to society in diverse ways delivering
care and warmth through concrete actions demonstrating the responsibility and humanitarian spirit of a pharmaceutical en-
terprise. It adheres to the philosophy of pursuing corporate development alongside fulfilling social responsibilities striving for
the coordinated development of economic and social benefits. Case Building a Foundation for Education Through Public Welfare
Advancing Inclusive Healthcare In June 2025 Shandong Luoxin donated RMB 200000 to the Linyi University Development and Education Founda-tion to support the university’s educational development programs and educational infrastructure. This initiative
not only strengthens the university’s hard power in education but also lays a solid foundation for the Company to
deepen its school-enterprise collaboration and cultivate a pipeline of professional talents reflecting the Compa-
Luoxin Pharmaceutical has long been committed to promoting equitable access to medical resources so that high-quality ny's commitment to supporting education and giving back to society.medical achievements can benefit more people. Committed to empowering people’s health through innovation and fulfilling
social responsibilities with dedication the Company continuously promotes the in-depth development of inclusive healthcare
enabling more people to share the health benefits delivered by pharmaceutical and medical innovation. In improving the
accessibility of medical services and alleviating the financial burden of medical care and medication for the public Luoxin
Pharmaceutical has fully leveraged its strengths. Through concrete actions the Company has earnestly fulfilled its social Charitable Education Assistance in Luozhuang District
responsibilities and industry mission making a lasting contribution to advancing inclusive healthcare and safeguarding the Case
health of all citizens.In 2025 Shandong Luoxin donated RMB 50000 to the Luozhuang District Char-
ity Federation of Linyi City to support charitable education initiatives demon-
strating its commitment to fulfilling social responsibility through concrete
Case Medical Insurance Empowering Access to Healthcare actions. The Company has always remained committed to its social responsibil-
ities and its founding mission integrating public welfare into its development.This charitable act not only safeguards the growth of students but also contrib-
In December 2025 the Company’s core product Tegoprazan Tablets (brand name: Taixinzan) gained a new utes to the balanced development of regional education. The Luozhuang Dis-medical insurance indication for “combination with appropriate antibiotics for the eradication of Helicobacter py- trict Charity Federation of Linyi City presented the Company with a certificatelori.” Combined with the renewed indications for reflux esophagitis and duodenal ulcer the drug has achieved full of honor. This recognition inspires the Company to continue its dedication to
medical insurance coverage for all three indications. As China's first domestically developed P-CAB class acid-sup- public welfare share warmth and promote sustainable social development.pressing drug approved for three indications this product has significantly improved the treatment outcomes of
gastrointestinal diseases by virtue of its advantages including rapid onset of action excellent efficacy safety
and ease of use. Its full inclusion in the national medical insurance catalogue has effectively reduced patients' fi-
nancial burden for medication and expanded access to innovative drugs representing a typical practice of Luoxin
Pharmaceutical in promoting inclusive healthcare through scientific and technological innovation and fulfilling the Rural Revitalization
social responsibility of a pharmaceutical enterprise.In response to the national call Luoxin Pharmaceutical has been actively engaged in rural revitalization. Through financial
support and project cooperation the Company has helped promote the development of its paired assistance regions. Through
long-term investment and concrete actions the Company earnestly fulfills its social responsibilities and contributes to the com-
prehensive revitalization of rural areas.Case Donation to Nujiang Yunnan
In February 2025 Shanghai Luoxin actively responded to the call of private
enterprises to "Join Hands to Revitalize Rural Areas and Pair Hundred Enter-
prises with Hundred Villages" completing the fourth and fifth phases of paired
assistance and donations to Fudeng Village Tongdian Town Lanping County
Nujiang Yunnan Province with a total donation amount of RMB 40000. Since
2021 the Company has continuously participated in the Village-Enterprise Pair-
ing Assistance Program launched by the Shanghai Pudong New Area Feder-
ation of Industry and Commerce. With accumulated donations totaling RMB
100000 the funds are earmarked for improving local production and living con-
ditions. Through targeted assistance and long-term commitment the Company
has advanced the rural revitalization strategy providing warm support for the
development of its paired regions.
52 532025 Environmental Social and Governance (ESG) Report About the Report
04 Strengthening Governanceto Lay a Solid Foundation for Development
Party Building Drives Development 56 In response to the United Nations Sustainable Development Goals (SDGs)
Corporate Governance Structure 58
Risk Management and Internal Control 60
Transparency in Governance 62
54 552025 Environmental Social and Governance (ESG) Report Strengthening Governance to Lay a Solid Foundation Afobro Dute vtheelo Rpempeonrt
Party Building Drives Development Case Collective Film Viewing by Party Branches Sparks Ideological Resonance
In 2025 the First and Second Party Branches of the Group
Management Center jointly organized a red-themed film
Party Organization Building screening activity themed "One Luoxin Unified Action". Party members gathered to watch the film Dead to Rights with a
session for historical fact exchange and sharing held before
the screening. The activity guided Party members to foster
Guided by Party building Luoxin Pharmaceutical has deeply integrated the Party’s leadership into every aspect of its gover- profound patriotism and strengthen their sense of historical
nance. The Company continuously strengthens the building of primary-level Party organizations and improves the system for mission while remembering history and honoring revolution-
integrity in practice and risk prevention and control. This ensures that the Company's strategy aligns with national develop- ary martyrs. It further transformed this emotional resonance
ment priorities and fully guarantees its high-quality and sustainable development. Luoxin Pharmaceutical adheres to the guid- into practical motivation to forge ahead with the enterprise
ance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era fully implements the general requirements and to dedicate themselves to their respective positions. Fo-
for Party building in the new era and the Party’s organizational line for the new era upholds fundamental principles and breaks cusing on internal ideological exchanges the activity upheld
new ground and forges ahead with dedication and perseverance. It continuously strengthens the political and organizational strict economy and careful budgeting fully embodying the
functions of Party organizations thereby providing a strong guarantee for the Company’s high-quality transformation and distinctive characteristics of flexibility and pragmatism.development as well as for safeguarding the people's health. As of the end of the reporting period the Company had 10 Party
organizations and 375 Party members.Case On-site Study Tour of R&D Party Branch Forges Patriotism and Dedication to the Country
10 Unit(s) 375 Person(s) 23 Time(s) 50 RMB 10000 In 2025 centering on the core theme of "Wholehearted Loy-
alty to the Party Serving the Country through Pharmaceutical
Number of Party Number of Party Number of Party- Funds for Party- Endeavors" the Party Branch of the Pharmaceutical Research
Organizations Members building activities building activities Institute organized Party members in the R&D field to carry
out immersive on-site education at the Zhu Village Red Edu-
cation Base in Linshu County. The Party members visited the
Battle Memorial Hall and the Front Support Hall in succes-
Party-building Activities sion solemnly renewed the Party admission oath in front of the monument and conducted in-depth discussions based on
their practical work in pharmaceutical R&D. This activity effec-
tively consolidated the ideals and convictions of R&D person-
Luoxin Pharmaceutical places great emphasis on Party building. In 2025 under the core theme of "One Luoxin Unified Action" nel promoted the inheritance of the revolutionary heritage
the Company systematically launched learning education and practical activities on the history of revolution. A total of 23 and further inspired all participants to turn the spirit of over-
Party-building activities were held throughout the year with RMB 500000 allocated to Party member activities. Adhering to the coming difficulties forged by revolutionary predecessors into
strengthening of top-level design the Company takes tempering Party spirit and inspiring position-based responsibility as its the driving force to scale new heights in scientific research. It
goals and has built a Party building work pattern featuring overall planning by the Group implementation by Party branches has been fully integrated into the concrete practice of contrib-
and coordination between key points and all aspects. Meanwhile it has innovated activity formats and conducted diversified uting to the "Healthy China" initiative.learning and practice in a categorized and hierarchical manner including collective film screenings by Party branches study
tours at red education and immersive education. The Company has strictly standardized fund management and safety guar-
antees driving the practical transformation of learning outcomes into effective performance of duties.The series of Party-building activities has achieved in-depth integration of Party spirit cultivation and corporate mission effec-
tively enhancing the political awareness theoretical literacy and team cohesion of Party members. It has also stimulated the
endogenous motivation of all Party members to anchor their positions and strive to be pioneers injecting a strong "red driving
force" into the Company's high-quality development.
56 572025 Environmental Social and Governance (ESG) Report Strengthening Governance to Lay a Solid Foundation for Development
Corporate Governance Structure Key Performance
Meeting Number of Meetings Held Number of Proposals Adopted
General meeting 7 34
Operations of the Board of Directors Board of Directors 15 57
Audit Committee 8 24
Luoxin Pharmaceutical strictly adheres to relevant laws and regulations including the Company Law of the People's Republic
of China the Securities Law of the People's Republic of China and the Code of Corporate Governance for Listed Companies.It has established a standardized and sound corporate governance structure. The Company has established a governance Strategy Committee 2 9
mechanism with the general meeting as the supreme authority the Board of Directors as the core decision-maker and the
Management as the executive head. The Board of Directors has established the Strategy Committee Audit Committee Nom-
ination Committee and Remuneration and Appraisal Committee forming a governance system that supports hierarchical Remuneration and Appraisal Committee 7 10
decision-making provides professional support and enables efficient execution.This structure clearly defines the boundaries of authority and responsibilities of each governance body. All special committees Nomination Committee 3 4
effectively exercise their professional functions thereby enhancing the scientificity independence and standardization of the
Board of Directors' decision-making. The efficient execution mechanism ensures the implementation of strategies continuously Special Meeting of Independent Directors 3 11
enhances governance compliance and operational efficiency and lays a solid governance foundation for the Company's long-
term steady development.General Board of Composition of the Board of Directors
Meeting Directors Management
To continuously improve the effectiveness of corporate governance and enhance the soundness of decision-making and strate-
gic execution Luoxin Pharmaceutical has been continuously optimizing the structure of its Board of Directors. The Company’s
Board of Directors currently consists of 7 directors including 3 independent directors (42.86%) and 1 female director (14.29%).The independent directors fully exercise their roles in independent supervision and professional checks and balances.Adhering to the principle of diversified governance the Company considers factors such as gender age educational back-
ground and professional experience of director candidates in light of its actual development so as to further enhance the
effectiveness and professionalism of the Board of Directors' decision-making. The age of the Company’s Board of Directors
ranges from 38 to 79 years old with diverse professional backgrounds and profound expertise and extensive practical expe-
rience in corporate management medicine and pharmaceuticals financial services and other fields. Among them 3 indepen-
dent directors are professionals in financial accounting journalism and communication and pharmacy respectively and can
provide precise support for the Company’s decision-making with their respective professional advantages.Table of Board Members and Their Positions
Name Gender Age Education Background Major Position
Organizational Chart of Luoxin Pharmaceutical
Chairman Director Chairman of the Strategy Committee
Liu Zhenteng Male 40 Master’s Degree Accounting Member of the Nomination Committee Member of the
Luoxin Pharmaceutical has established a regular meeting system. In 2025 the Company convened 45 meetings on corporate Remuneration and Appraisal Committee
governance-related matters deliberating and adopting more than 140 proposals covering core governance bodies including Liu Zhenfei Male 38 Bachelor’s Degree Business Adminis- Director Member of the Audit Committee Member of the the general meeting the Board of Directors and its special committees. By virtue of a tiered standardized and efficient tration Strategy Committee
deliberation and decision-making mechanism the Company has effectively ensured the compliant operation of its corporate
governance continuously enhanced the soundness and effectiveness of decision-making on major matters and provided a Han Fengsheng Male 51 Bachelor’s Degree Pharmacy Director
solid governance guarantee for the standardized operation and steady development of the Company.Ma Shaohong Male 43 Bachelor’s Degree Biotechnology Employee Director
45 140 Xu Xia Female 54 Bachelor’s Degree Financial Accounting Independent Director Chairman of the Audit Committee Time(s) Item(s) Member of the Nomination Committee
Guo Yunpei Male 79 Associate Degree Journalism and Com- Independent Director Chairman of the Remuneration and
Convene various Reviewed and approved munication Appraisal Committee Member of the Audit Committee
meetings over relevant proposals Independent Director Chairman of the Nomination
Zuo Min Male 65 Master’s Degree Pharmacy Committee Member of the Remuneration and Appraisal
Committee Member of the Strategy Committee
5859
Remuneration and
Appraisal Committee
Nomination Committee
Audit Committee
Strategy Committee2025 Environmental Social and Governance (ESG) Report Strengthening Governance to Lay a Solid Foundation for Development
Risk Management and
Internal Control Internal Control and Supervision Mechanism
Luoxin Pharmaceutical attaches great importance to the development of its internal supervision and risk management and
control system. In view of the pharmaceutical industry’s stringent compliance requirements and complex business processes
as well as the actual needs of corporate governance and standardized operation the Company has formulated a systematic
Risk Management System Internal Audit System in accordance with the Company Law the Securities Law and other relevant laws and regulations.The Company has set up an internal audit department under the Audit Committee which operates independently as a ded-
Luoxin Pharmaceutical has continuously deepened its risk management and control philosophy and actively explored multi-di- icated internal audit institution and is directly accountable to and reports to the Audit Committee. The internal audit depart-
mensional risk management and control pathways that cover diverse scenarios and the entire process. In terms of risk man- ment is staffed with no fewer than two full-time auditors and may engage external professional personnel. The head of the
agement and control the Company has focused on risk areas including policies R&D costs and international markets and department is nominated by the Audit Committee appointed and removed by the Board of Directors has no affiliation with
continuously optimized differentiated response strategies and measures. the controlling shareholder and shall not be concurrently held by the head of the finance department.The internal audit department is responsible for formulating the annual audit work plan and submitting it to the Audit Com-
mittee for deliberation. It carries out audit work based on business processes prepares and reviews working papers and
01 Policy risk regularly submits audit reports and internal control evaluation reports. Upon the completion of audit projects the depart-ment urges the rectification of internal control deficiencies identified in the audits and incorporates follow-up reviews into
the annual work plan.In response to industry policy risks arising from the deepening of national medical reform and adjustments to medical The scope of internal audits covers the Company its wholly-owned subsidiaries and equity-method investees over which
insurance policies the Company has proactively adjusted its business direction and accelerated its transformation into the Company has significant influence. It encompasses all business processes related to financial reporting and information
an innovative pharmaceutical enterprise. By focusing on R&D optimizing its product portfolio and improving manage- disclosure with a particular focus on audits in key areas including external investments asset disposals related-party trans-
ment efficiency the Company has actively addressed the challenge of shrinking profit margins. actions and utilization of raised funds. The Company regularly assesses the effectiveness of its internal control systems.The internal audit department exercises its audit authority including the right to review documents and conduct on-site
inspections in accordance with the law. It actively cooperates with external audit work assists the Audit Committee in per-
forming its duties puts forward recommendations on accountability and rectification for violations and supervises the full
02 R&D risk implementation of such requirements.
In response to R&D risks such as the long cycle and high uncertainty of new drug development as well as potential
clinical failures and R&D delays in the clinical stage the Company has improved its R&D and innovation management Integrity System
system strengthened risk assessment at project initiation and key milestones and optimized project management
processes. It has implemented refined management and control from the dimensions of technology quality safety and Luoxin Pharmaceutical strictly complies with the Criminal Law of the People's Republic of China the Anti-Unfair Competition
budget effectively improving R&D success rate and risk response capability. Law of the People's Republic of China and other laws and regulations concerning bribery extortion fraud and money laun-
dering that materially affect the Company. It has established systems such as the Anti-Commercial Bribery System. Guided
by the core principles of strengthening compliance management and solidifying the foundation for law-based operation the
Company is committed to building a solid dual defense of compliant operations and integrity in business conduct.
03 Cost risk Based on actual conditions the Company conducts comprehensive investigations and tiered assessments of potential integrity
risks in the work content business processes and the systems and mechanisms of each department. It then formulates and
implements targeted prevention and control measures to mitigate various integrity risks effectively. Compliance and integrity
In response to cost risks arising from fluctuations in raw material prices and rising labor costs the Company has strict- requirements are fully integrated into all aspects of conduct by employees and partners. They cover not only interactions with
ly controlled procurement costs by optimizing supply chain management and implementing strategic procurement government departments medical and health institutions and other entities but also key business processes such as busi-
practices. At the same time it has strengthened internal management improved production efficiency and optimized ness negotiations material procurement project contracting and the management of personnel funds and assets as well
human resource allocation effectively mitigating overall cost risks. as external collaboration activities. The relevant institutional framework shall strictly comply with applicable national laws and
regulations as well as the Company’s internal management norms. Meanwhile the Company incorporates the effectiveness of
integrity risk prevention and control into its integrity performance appraisal system thereby further standardizing professional
conduct and strengthening the ideological foundation for resisting corruption and preventing misconduct. These measures are
04 International market risk designed to effectively advance anti-bribery and anti-corruption efforts help build a corporate image characterized by integ-rity and compliance with the law and lay a solid foundation of compliance and integrity to ensure the Company's long-term
and steady development.In response to international market risks such as exchange rate fluctuations and policy changes during international In addition Luoxin Pharmaceutical integrates integrity requirements into the full lifecycle management of suppliers. During
expansion the Company has reduced its reliance on a single market through diversified market layouts and the expan- the onboarding phase suppliers are required to sign integrity and compliance documents such as the Code of Conduct for
sion of multiple overseas markets. Meanwhile it has strengthened exchange rate risk management and used financial Business Partners. Integrity-related risk assessments are conducted during the compliance review process and integrity per-
derivatives to hedge against exchange rate risks when necessary. formance is incorporated into the comprehensive supplier evaluation system. Suppliers found to have engaged in integrity
violations such as commercial bribery are immediately disqualified.
05 Environmental protection risk Whistleblowing Channels
To further foster a culture of integrity and build a fair impartial standardized and transparent business environment the Com-
In response to environmental protection safety risks arising from the continuous improvement of national environmen- pany has established the "Integrity Luoxin" supervision and management mechanism as an important initiative to strengthen
tal protection standards and intensified supervision as well as potential penalties for the Company's failure to meet compliance governance and protect the legitimate rights and interests of the Company and all stakeholders.standards promptly the Company has strictly complied with environmental protection laws and regulations main- In the process of cooperation with the Company business partners and other relevant parties may report any misconduct
tained consistent investment in environmental protection and upgraded treatment facilities carried out environmental that infringes upon their own or the Company’s legitimate rights and interests (including but not limited to bribery corruption
protection training to strengthen internal control standards and enhanced monitoring of key pollution discharge points unfair treatment trade secret disclosure sexual harassment etc.) through the Company’s dedicated whistleblowing channels.effectively mitigating environmental protection risks.Email for supervision and feedback: compliance@luoxin.cn
60 612025 Environmental Social and Governance (ESG) Report Strengthening Governance to Lay a Solid Foundation for Development
Anti-Unfair Competition Investor Communication
The Company strictly adheres to the Anti-Unfair Competition Law of the People's Republic of China and other relevant laws
and regulations to ensure that its business operations are lawful and compliant. It resolutely prohibits unfair competition and
monopolistic practices and actively upholds market order and a fair competitive environment. The Company upholds the prin- Luoxin Pharmaceutical upholds the philosophy of high efficiency transparency openness and pragmatism in investor com-
ciple of fair competition in all business activities and does not engage in any monopolistic or unfair competition practices. It also munication and treats investor relations management as a key measure to improve corporate governance and elevate gov-
actively encourages supports and protects the supervision of such acts by all organizations and individuals. ernance standards. The Company strictly complies with laws regulations and regulatory requirements. Based on compre-hensive timely and standardized information disclosure it continuously deepens exchanges and interactions with investors
enhances investors’ understanding and recognition of the Company’s strategies and operational development fosters a sound
corporate culture that respects and protects investors and promotes the synergistic maximization of corporate value and
shareholders’ interests.Transparency in Governance The Company always prioritizes the protection of the legitimate rights and interests of small and medium-sized investors ac-tively strengthens communication and collaboration with various investors research institutions and media and continuously consolidates its investor relations management. It has established diverse and regular communication channels creating an
efficient two-way mechanism through various means including investor visits and inquiries online interactions telephone
communications and on-site visits. In 2025 the Company conducted investor exchanges through the Hudongyi Platform the
investor hotline and other channels. Among them it responded to 63 inquiries on the Hudongyi Platform received 2 on-site
visits and participated in 1 online collective reception day for investors.Information Disclosure With a sustained transparent and multi-channel communication mechanism the Company has further deepened investors’
understanding and recognition of its development forged stable and sound investor relations and laid a solid foundation for
Luoxin Pharmaceutical attaches great importance to information disclosure management. In strict accordance with the Secu- its sustained and steady development in the capital market.rities Law of the People's Republic of China the Rules Governing the Listing of Stocks on Shenzhen Stock Exchange the Mea-
sures for the Administration of Information Disclosure of Listed Companies and other laws and regulations the Company has
formulated the Information Disclosure Management System which clarifies that information disclosure must follow the basic
principles of being true accurate complete timely and fair. Case Online Collective Reception Day for Investors
In terms of internal management the Company’s overall information disclosure management is coordinated and administered
by the Board of Directors. The Secretary to the Board takes the lead in organizing and coordinating collaboration among
all business departments to carry out information disclosure-related work in a On May 15th 2025 Luoxin Pharmaceutical participated in
standardized manner including periodic reports and interim reports. In 2025 the the "Online Collective Reception Day for Investors of List-
Company disclosed a total of 161 documents. The Company discloses information ed Companies in Shandong and 2024 Online Performance
through the designated information disclosure platforms of the Shenzhen Stock
Exchange and compliant media outlets to ensure that all investors have equal 161 Briefing". The Company’s senior management team held Copy(ies) an online interactive session with investors and provided
and convenient access to the Company’s information. Meanwhile the Company detailed responses to market concerns including the prof-
has put in place a standardized management and accountability tracing mech- Publicly disclosed it drivers and the sustainability of its performance in 2024
anism for personnel involved in information disclosure providing a solid institu- documents and Q1 2025 performance. This activity served as an effi-
tional guarantee for the compliant and orderly implementation of information cient communication bridge between the Company and its
disclosure work. investors. By promptly addressing market concerns it effec-tively boosted investor confidence and further elevated the
Company’s investor relations management capabilities and
capital market image.Case ESG Specialized Training
In 2025 the Company organized an ESG specialized training for its senior management. The training closely fo-
cused on the regulatory requirements for ESG information disclosure of A-share listed companies systematically
interpreted relevant national policies laws and regulations and conducted an in-depth analysis of the key points
and practical standards for ESG information disclosure. This initiative is designed to further enhance the standard-
ization accuracy and transparency of the Company's ESG information disclosure facilitate its transition from
"passive compliance" to "proactive and standardized disclosure" continuously foster a responsible market image
and lay a solid foundation for its long-term and high-quality development through improved information disclosure.
62 632025 Environmental Social and Governance (ESG) Report Appendix
Appendix I: Key Performance Indicators
Indicator Unit 2025 Indicator Unit 2025
Economic Performance Number of performance briefings Time(s) 1
Operating income RMB 10000 227345.77 Response to investor inquiries Time(s) 63
Tax amount RMB 10000 18970.28 Receive on-site visits Time(s) 2
Total assets RMB 10000 372529.25 Environmental Performance
Net assets attributable to
shareholders of the listed company RMB 10000 116403.54 Scope 1 GHG emissions tCO2e 9179.83
Governance Performance Scope 2 GHG emissions tCO2e 30506.82
Number of board members Person(s) 7 Total GHG emissions (Scope 1 and Scope 2) tCO2e 39686.65
Number of female directors Person(s) 1 Environmental Protection Investment RMB 10000 1401.32
Percentage of female directors % 14.29 Electricity consumption kWh 57494944.45
Number of board meetings held Time(s) 15 Natural gas m3 4595347
Number of independent directors Person(s) 3 Water consumption T 684418.37
Percentage of independent directors % 42.86 Hazardous waste generation T 353.36
Number of general meetings held Time(s) 7 Non-hazardous waste generation T 955.41
Number of Special Meetings of Independent
Directors held Time(s) 3 Quantity of recyclable waste generated T 237.73
Number of Audit Committee meetings held Time(s) 8 Number of environmental protection training sessions Time(s) 44
Number of Strategy Committee meetings held Time(s) 2 Number of employees trained in environmental protection Person-time(s) 2268
Number of Nomination Committee meetings held Time(s) 3 Total duration of environmental protection training sessions Hour(s) 170
Number of Remuneration and Appraisal
Committee meetings held Time(s) 7 Number of emergency training sessions Time(s) 14
Number of Party Organizations Unit(s) 10 Number of employees covered by emergency training Person-time(s) 519
Number of Party Members Person(s) 375 Total duration of emergency training Hour(s) 46
Funds for Party-building activities RMB 10000 50 Environmental protection emergency drills Time(s) 15
Number of Party-building activities Time(s) 23 Number of participants in environmental protection emergency drills Person-time(s) 537
Publicly disclosed documents Copy(ies) 161
64 652025 Environmental Social and Governance (ESG) Report Appendix
Appendix II: Indicator Index Table
Index to Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability Report
(For Trial Implementation)
Indicator Unit 2025
Social Performance Dimension Topic Article Chapter
Response to Climate Change Article 21–28 Response to Climate Change
Total number of employees Person(s) 2962
Pollutant Discharge Article 30 Green Operations
Number of veteran employees Person(s) 25
Waste Disposal Article 31 Green Operations
Number of employees with disabilities Person(s) 2
Ecosystem and Biodiversity
Percentage of male employees % 55 Environmental Protection
Article 32 Not applicable1
Environmental Compliance
Management Article 33 Environmental Management SystemPercentage of female employees % 45
Energy Utilization Article 35 Green Operations
Percentage of employees aged under 29 % 30
Water Resources Utilization Article 36 Green Operations
Percentage of employees aged 30–49 % 68
Circular Economy Article 37 Green Operations
Percentage of employees aged 50 and above % 2
Rural Revitalization Article 39 Social Contributions and Philanthropy
Percentage of employees with an associate’s degree or lower % 58
Social Contributions Article 40 Social Contributions and Philanthropy
Percentage of employees with a bachelor’s degree % 37
Innovation-Driven Article 42 Innovation-Driven Industrial Upgrading
Percentage of employees with a master’s degree or higher % 5
Ethics of Science and Technology Article 43 Not applicable2
Number of employee training sessions Time(s) 196
Supply Chain Security Article 45 Supply Chain Management
Employee training expenses RMB 153862.64
Social Equal Treatment to Small and
Medium-Sized Enterprises Article 46 Not applicable3Total number of employees participating in trainings Person-time(s) 6119
Product and Service Safety
and Quality Article 47 Product Responsibility and Quality SafetyTotal training hours of employees Hour(s) 1641.01
Data Security and Customer
Privacy Protection Article 48 Product Responsibility and Quality SafetyNumber of R&D personnel Person(s) 109
R&D investment RMB 10000 10748.39 Employee Interests and Development
Employees Article 50 Employee Care and Well-being
Number of safety training sessions Time(s) 173 Occupational Health and Safety
Number of employees in safety training Person(s) 25797 Due Diligence Article 52 ESG Governance
Cumulative number of granted patents Item(s) 375 Stakeholder Communication Article 53 ESG Governance
R&D projects Item(s) 20 Governance Anti-Commercial Bribery and
Anti-Corruption Article 54 Risk Management and Internal Control
Total number of suppliers Supplier(s) 1420 Anti-Unfair Competition Article 55 Risk Management and Internal Control
1 The Company does not maintain any production bases or operation sites located in nature reserves ecological conservation
habitats sensitive ecosystem areas or ecologically fragile areas.2 The Company has not engaged in scientific research or technological development activities in the sensitive areas of artificial
intelligence and other related technologies.3 During the reporting period the Company did not have any situation of overdue payment of funds to small and medium-sized
enterprises. Therefore this issue is not applicable to the Company.
66 672025 Environmental Social and Governance (ESG) Report
Appendix III: Feedback Form
Dear Readers
Thank you for reading the 2025 Environmental Social and Governance (ESG) Report of Luoxin Pharmaceutical Group Stock Co.Ltd. To provide you and other stakeholders with more professional and valuable corporate ESG information we kindly request
your assistance in completing the relevant questions in this feedback form. Your input will help us further enhance our ESG
performance in the future.
1、Your relationship with Luoxin Pharmaceutical is:
□ Employee □ Customer □ Supplier □ Regulatory Authority □ Media □ Others __________ (Please specify)
2、Your overall evaluation of the Report:
□ Excellent □ Good □ Fair □ Poor □ Very Poor
3、Your evaluation of the structure of the Report:
□ Highly reasonable □ Reasonable □ Fair □ Poor □ Very poor
4、Your evaluation of the layout design and presentation of the Report:
□ Excellent □ Good □ Fair □ Poor □ Very Poor
5、Your evaluation of Luoxin Pharmaceutical's overall performance on environmental issues:
□ Excellent □ Good □ Fair □ Poor □ Very Poor
6、Your evaluation of Luoxin Pharmaceutical's overall performance on social issues:
□ Excellent □ Good □ Fair □ Poor □ Very Poor
7、Your evaluation of Luoxin Pharmaceutical's overall performance on governance issues:
□ Excellent □ Good □ Fair □ Poor □ Very Poor
8、Your comments and suggestions on Luoxin Pharmaceutical’s ESG practices:
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